Freeport-McMoRan (FCX)

[eddy2]

Company sentiments has been a short position for some time. Let me explain how the numbers represent this sinario.

Let’s take the time again to examine the bottom unknowns:

Capital surplus
Retained earnings
Share holders deficit
Treasury stock
Goodwill
Accounts receivables


As we have discovered the financials are written with the interest of the company being first. With that in mind you should be asking your self what are the indicators of a buy back of shares and what indicates the selling of equity or the minimizing of risk.

If a company short sells the market by the issuing of equity there is a revenue component connected to this as well a tax credit due to the tax’s paid on the generated revenue. If new equity is introduced due too the forward splitting of shares then the tax’s paid will exceed the capital surplus.

So in a buy back you will have a substantial gain in capital surplus if new equity is introduced and retained due too the capital having a tax debt associated too the receivables to be collected in the contract for purchase between the company and there clients.

Because it’s designated as a public company the client must be a registered public entity. In other words you can not sell equity based on credit to the general public unless a registered public entity is the go between putting up the collateral. This collateral is referred to as underwriting an offering of credit. This can be done internally or by the use of an institution. There is no free ride when it comes to underwriting collateral for the consumer or the company that will spread the underwriting fees trough out its product offering to its customers often pending what product may or may not support it.

The bottom line is the selling of paper is a product as well no less then selling any other commodity it maybe offering. Buyer beware, do your DD, no your numbers and there underlying meanings. Knowledge is power and your gateway to wealth.