My general sense from the article was that the company boosted their numbers by overvaluing the "goodwill" of acquired companies, moved poorly performing businesses into "non-continuing operations", and other fancy financial footwork. While the numbers were on the balance sheets, the ramifications would elude myself and most people in the stock market.
I'm hesitant to use the term "investors" as I think most people in the market have only a general idea of how businesses work. Money rolls in and get spent. We know that, but how does that relate to the price of the stocks we purchased. "Investing" may be no more than trusting others by purchasing funds. As Howard, my broker, likes to point out, people don't buy stocks, they buy stories.
I did some web searching to see that John Blystone, the CEO in the article, left the company 3 months after the article came out. His retirement package was somewhat less than the bonanza he might have been expecting. How did the company fare? I took a look at finance.yahoo.com. The stock price about the time the article was written seemed to be falling from $60 to about $40. Pretty sickening, but nothing compared to its plunge from ~120 to ~33 in October of 2008. I have no idea what that means. I expect that there is plenty of material for financial writers and social writers.
It would be an interesting exercise to have finance students write a paper explaining the article for those like me.
No comments:
Post a Comment