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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (245915)	4/27/2010 7:34:14 PM
From: Mike M2	Respond to of 306849

Andrew Smithers on stock options "...It's not just the gross amounts of money that have been handed out to undeserving executives. Stock option windfalls have been the unspoken agenda behind many a megamerger, and the not-so-hidden motive behind dotcoms whose business plan starts and ends with a 'liquidity event' (that is, an initial public offering). In this way stock options have contributed generously to the swelling stock market bubble. All this can be traced back to a hole in company accounts where options should be. It is now so large as to cause many annual reports to give investors a false impression of companies' real financial condition. London investment adviser Andrew Smithers estimates that restating the net profits of the largest US companies to take full account of their options would reduce their 1998 figures by more than half. Bear Stearns, a US investment bank, found that operating profits for computer networking companies would be reduced by 26 per cent under a different form of option accounting. ... " guardian.co.uk