> -----Original Message-----
> From: owner-lbo-talk at lists.panix.com
> [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Jim Westrich
>
> http://www.billparish.com/msftfraudfacts.html
>
>Apparently Bill Parrish does not like Microsoft and
> seems to have recently discovered the realities of modern corporate
> accounting.
The abuse of stock options and their non-reporting in financial statements is hardly a cranky issue of concern. THE ECONOMIST among others has red-flagged the issue and my Microsoft work convinced me it is a real issue of concern in evaluating Microsoft's real profits.
If there is a scenario for a 1929-style meltdown, it is based on the stock option problem. One can imagine a scenario where the markets suddenly "notice" the problem, officially reevaluate the stock prices on Microsoft and other firms, driving the price down a bit. In reaction, all the managers and employees with stock options outstanding rush to cash them in before the companies lose too much value, feeding the downward spiral. Tied into other problems that the resulting cash-flow problem - especially sharp for many of the dot-com companies that have little ongoing revenue - and you could have a nice meltdown scenario.
--Nathan Newman