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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Market Tracker who wrote (8604)	5/12/1998 8:26:00 PM
From: BelowTheCrowd	Read Replies (1) \| Respond to of 18691

MT, Most of this was old news. Briloff wrote a fairly direct piece a couple of months ago, highlighting the fact that DIS had created a $2.5 billion "slush fund" from restructuring costs in the ABC merger, which has contributed greatly to the reported earnings since then. I don't fully recall the details but Briloff's basic thrust was that they managed to create paper assets, purportedly from the merger, which had not existed on ABC's balance sheet pre-merger. According to the article, that paper reserve has since been used to hide normal operating expenses which they are still claiming are merger-related. The article was very critical of the auditors who allowed them to get away with it, but concluded that the reserve was now used up and that they would now have to come out with earnings which are realistic. The latest bit in Barrons was just showing some more recent financial trickery in their pro-formas. In essence they presumed that everything good WOULD happen, and everything bad would not, giving an especially rosy picture. The street didn't react much at all when the big article came out, and apparently isn't reacting much to this latest tidbit. It looks like it'll take a real earnings shocker to spook them. According to Briloff that should happen this year, as the real costs of ABC start becoming apparent. mg