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Fleckenstein had a link to a really good article a few years ago on how
companies like Cisco cooked the books to fake earnings from the
soon-to-be-DotBombs.
I forgot all the details but basically, the DotCom would lease the equipment
and give Cisco stock instead of cash for the networking hardware. The
DotCom would show no cash outlays but would book an increase in assets (the
hardware). Cisco treated the transaction as a normal sale and would book
the revenue. Needless to say, this strategy bit the dust a couple of years
ago and I suspect this had a lot to do with the MASSIVE, MASSIVE write-off
Cisco took at the time. They blamed it on over production and said they
would not resell the equipment that they were writing off but there have
been rumors to the contrary.
Kent
----- Original Message -----
From: "M. Simms" <prosys@xxxxxxxxxxxxxxxx>
To: "RealtradersList" <realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, August 02, 2002 12:10 PM
Subject: [RT] Here's a good one: Nasdaq 100 below S&P 500 ?
Can it happen ? Only 50 points away...
and there is MUCH CONSTERNATION over Cisco's earnings due out next week.
That could push it down big-time.
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