Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: James R. Barrett who wrote (29380)	6/26/1998 8:35:00 AM
From: Cynic 2005	Respond to of 132070

Jim, looks like Fleckenstein anticipated your question. -g- My point more or less the same as that of Fleck. <<The envelope please: Why is all this happening? My opinion is that corporations have become too focused on their stock prices. This is due to ego or to the fact that so many employees own options that they have to manage the stock price rather than manage the business. Plus, I think shareholders feel good when management cares about the stock price. On one hand it is good that management cares about the stock price and is willing to take steps to promote stability. But on the other hand, they run the risk of hurting their credibility by not telling the truth or coming clean on certain issues. Sometimes what they do to improve their earnings in the short-term is very bad for the long-term outlook. Personally, I believe Intel has been guilty of this for quite some time and I don't see why people should give any credibility to companies that have been completely dishonest. 3Com (COMS) is another good example. They had been less than forthright for quite awhile and the SEC caught them trying to cook the books in their merger with U.S. Robotics. Now the stock market rejoices today, taking 3com up $5 because Eric Benhamou, their Chairman, has stated that 3com has "turned the corner" and that he thinks the inventory problem has been completely resolved. Now why would anybody believe this guy? In my opinion, he isn't telling the truth. Why should we believe these people who have shown an unwillingness to tell the truth? Down the road all of this will matter. I think it's important for people to know that corporate executives are doing things that are not in the interest of their companies long-term. One should be leery of being involved with companies where truth is not valued. >> stocksite.com

To: James R. Barrett who wrote (29380)	6/26/1998 10:46:00 AM
From: Knighty Tin	Respond to of 132070

Jim, As I have always told people who screw up corporate bonus plans, you cannot expect most people to operate in a way that is counter to their own financial well-being. If you pay somebody a bonus to do something, make certain that something, with all of its ramifications, is what you want done. In America, execs are paid to destroy corps longer term so they can make eps for the next quarter and protect the multiple. Then, when reality no longer fits that model, it is not surprising that accounting tricks are used with a lot of blue smoke and mirrors and huge writeoffs form the meat of most eps reports. MB