• They’re onto Us
    Posted by on March 3rd, 2006 at 10:48 am

    From the Enron trial:

    Enron Corp.’s top managers fretted over a damning 2001 analyst report, fearful that Wall Street had uncovered its accounting tricks, a former executive testified on Thursday at the trial of former CEOs Jeffrey Skilling and Ken Lay.
    The witness, Kevin Hannon, said the report published in May 2001 by the Off Wall Street Consulting Group valued Enron at only half its value at the time and was discussed at a meeting of Enron’s senior managers, including Lay and Skilling.
    One top executive told the meeting the report was mostly valid in its criticisms, Hannon said.
    “And what did Mr. Skilling say?” prosecutor Cliff Stricklin asked Hannon.
    “He said ‘They’re onto us‘,” Hannon answered, which he took to mean “the investment community was starting to understand how Enron made money.”

    Actually, if they thought Enron was only worth half its value, then they weren’t even close to being onto them.

  • Restatements Soar Due to Sarbanes-Oxley
    Posted by on March 3rd, 2006 at 7:33 am

    Doitagain.gif
    The WSJ reports this morning:

    Restatements of financial results by public companies soared in 2005 as auditors drilled deeper into corporate accounts, in part because of a sharper focus on requirements laid out by the Sarbanes-Oxley corporate-governance act, according to research firm Glass Lewis & Co.
    The silver lining: The near-doubling in the number of restatements by U.S. companies last year — 1,195, compared with 613 in 2004 — could signal that financial-reporting changes made in the wake of the Enron and WorldCom scandals are working. Although restatements — which, after all, are acknowledgments of accounting errors — signal that management and auditors have missed problems and can lead to short-term swings in a company’s share price, they also give investors a truer picture of a company’s finances.
    “Over time, as companies continue to improve their internal controls, we expect the number of restatements eventually will decline, perhaps as soon as 2006,” San Francisco-based Glass Lewis said in a report to its clients, who include money managers and other large investors.

    Of course, the number of restatements could also decline if more companies decide it’s not worth the trouble of going public.
    Some folks love Sarbanes-Oxley. For one thing, it’s driving the boom in private-equity. It also might as well be called the Accountant Full Employment Act of 2002. Here’s the chart of Resources Connection (RECN), an accounting staffer, since the day Bush signed Sar-Box.

  • Motley Fool on Dell
    Posted by on March 3rd, 2006 at 6:35 am

    Yesterday, the Motley Fool had five entries on Dell.
    Danger! Horror! Get Out!
    (Originally published on Jan. 13, 2005)
    Mentions Dell in passing.
    The Quandary of the Double
    Mentions Dell in passing.
    The Market’s 10 Best Stocks
    (Originally published on Dec. 29, 2005)
    Dell’s on a chart of best stocks for past 10 years.
    An Astonishingly Cheap Stock
    Mentions Dell in passing.
    The Next Big Thing in Investing
    (Originally published on Dec. 12, 2005)
    Mentions Dell in passing.
    These are five consecutive “news stories” under the Headlines feature on the Yahoo Finance quote for the stock. In total, only two are original and all five merely reference the stock in passing.
    You won’t learn anything new about the stock by reading these. What will you learn about? Well, the Motley Fool’s newsletters like Income Investor, Inside Value, Hidden Gems and Rule Breakers are all heavily promoted in the entries.
    I hope Yahoo Finance bans this garbage from their site, or at least takes it away from the news section.

  • Google: Holla Back Girl
    Posted by on March 2nd, 2006 at 5:16 pm

    From 2004: Google’s Letter to Prospective Shareholders

    We will make decisions on the business fundamentals, not accounting considerations, and always with the long term welfare of our company and shareholders in mind.
    Although we may discuss long term trends in our business, we do not plan to give earnings guidance in the traditional sense. We are not able to predict our business within a narrow range for each quarter. We recognize that our duty is to advance our shareholders’ interests, and we believe that artificially creating short term target numbers serves our shareholders poorly. We would prefer not to be asked to make such predictions, and if asked we will respectfully decline. A management team distracted by a series of short term targets is as pointless as a dieter stepping on a scale every half hour. (So they’re saying I’m fat??)

    Today: Google Executives Exude Optimism

    Google Inc. executives provided investment analysts with a bright outlook Thursday in a display of confidence that appeared aimed at defusing growth concerns raised by the search engine leader‘s chief financial officer earlier this week.
    Schmidt underscored his optimism at one point by saying Google someday might generate $100 billion in annual revenue as it expands into a variety of new advertising channels, including television, radio and publishing. The 7-year-old company‘s revenue totaled $6.1 billion last year.

    Consider the scale stepped on.
    Another metaphor dies a painful death. I never though I’d see a large multinational corporation sell out for the almighty dollar.

  • NYSE To Go Public
    Posted by on March 2nd, 2006 at 3:31 pm

    After 213 years, the Big Board will hit the Big Board. The NYSE will have its public offering next week. The ticker symbol will be NYX.
    If you’re curious, the shares will trade on the NYSE.

  • Let Me Hear From You!
    Posted by on March 2nd, 2006 at 1:00 pm

    As always, if you have any stock questions (or tips), please feel free to e-mail me at eddy@crossingwallstreet.com. I’m happy to give you my opinion on any stock or investing in general; however per SEC rules, I’m not allowed to give personal portfolio advice.

  • Chico, Don’t Be Discouraged
    Posted by on March 2nd, 2006 at 12:52 pm

    What’s happening?
    Another “Can’t Miss” stock…misses. This time it’s Chico’s FAS (CHS), which earned 24 cents a share, one penny below the Street’s forecast.
    Apparently, one of penny of earnings is worth about 650 pennies in equity. The stock is currently down over 13%.
    CHS.bmp

  • The Midday Market
    Posted by on March 2nd, 2006 at 12:20 pm

    Another good day for energy, and not much else.
    Energy…………………….+0.65%
    Basic Materials…………-0.12%
    Telecom…………………..-0.12%
    Tech………………………..-0.31%
    Industrials……………….-0.42%
    Health Care……………..-0.48%
    Utilities……………………-0.58%
    Consumer Goods………-0.59%
    Financials………………..-0.70%
    Consumer Services…..-0.80%

  • ECB Raises Rates
    Posted by on March 2nd, 2006 at 10:34 am

    The European Central Bank just raised interest rates for the second time in the past few monhts, and it looks like they’re far from over. However, not everyone is pleased.

    Politicians and some economists see a risk that higher ECB rates will choke growth. French Finance Minister Thierry Breton said Feb. 13 that “we don’t see an increase of inflation in the euro zone.”

    Welcome to world of a unified currency! The French economy has been stuck in neutral for some time.
    Here’s more unilateralism from France:

    Paris has been increasingly accused of pursuing a protectionist agenda, particularly after its outspoken opposition to Mittal Steel’s E18.6 billion bid for Luxembourg-based rival Arcelor.
    Mr de Villepin said: “There is no reason that our American, Japanese or British friends should have tools that we do not. All I want is for France to fully play its role in globalisation and that our country can defend itself with all the tools needed to succeed, within the respect of the rules, European or international.”
    Mr de Villepin also outlined plans to boost employee shareholdings by allowing companies to issue free shares to staff, make profit-sharing share schemes more advantageous, transform overtime into shares, and create multi-company profit-sharing share schemes for specific projects.
    France is also granting companies the right to use “poison pill” defence strategies to protect themselves from hostile bids.

  • Don’t Overlook Line 45
    Posted by on March 2nd, 2006 at 10:26 am

    Do you have to pay the alternative minimum tax?

    “There’s no one thing that one can say for sure ‘this is going to be an AMT problem,'” said Mark Luscombe, a principal analyst with CCH, a tax-research, publishing and software firm in Riverwoods, Ill.
    That means some are likely shocked to find they’re in the AMT, a parallel tax system created in the late 1960s to target a handful of wealthy Americans who had managed to avoid paying income tax.
    “You don’t even have to be making a lot of money to fall into the alt-min anymore. It’s not about the big-income guy anymore,” said Barbara Steinmetz, a certified financial planner and enrolled agent in Burlingame, Calif.
    “Property taxes help boost you there. State income taxes help boost you there,” she said, noting that one client who formerly self-filed came to her for help with a $30,000 bill for unpaid AMT.