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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (208635)	12/9/2002 8:29:26 PM
From: robnhood	Read Replies (1) \| Respond to of 436258

Earlie , does this sound about right? Picked up off the Yahoo board---- <<Wake Up Longs/ Ur bein FLEECED!!!! by: nascrack1200 12/06/02 02:16 pm Msg: 193191 of 193559 this move by IBM to hide the true nature of their business. <br><br>They've been using almost all their free cashflow to buy stock (over $1 billion a quarter). This doesn't flow to the Income Statement, but instead is funneled through the balance sheet in "Stockholder Equity". This reduces the number of outstanding shares, thus giving them better earnings per share, but the purchases don't show up as an expense. <br><br>Now they're creating shares that they've bought back, again flowing through the balance sheet and not the income statement. <br><br>Brilliant! Increase your EPS by buying stock without incurring an expense. Get the smoothing "gains" on the income statement by overestimating returns from your pension fund which does show up on the income statement as earnings. When the actual true nature of the returns becomes so large as to be obvious (even to morons like itheicemang) you fund it with your own stock.<br><br>Damn brilliant, but I think people are finally figuring this one out. We'll see. Very difficult to figure out what the monkeys will do. >> disclosure-- short IBM at $84.61