Re: shooter~ Bernie also was questioned
KP,
Got a chance to go over the SEC filings a little bit more today.
Outside the outrageous loan Ebbers got from the company to pay for his failure as a investor, the crux of this investigation IMO..is centered around methods of booking revenues from accounts that were construed to be delinquent that might have been improperly charged against receivables, and possible over stating bookings from services that were cancelled,which is what TTWO did, but in a different way....perhaps re-stating revenues might be in order...just guessing here.
The write down of charges are a concern too, but feel that they were notified before on that.
The big one IMO,,is the stating of book value on a go forward basis once they account for new accounting regulations.
And the only reason i can see that being a major concern is: if WCOM has to write down their goodwill more then they have stated in the filings. If this were to be the case, it could put WCOM in trouble with debt covenants,as a further reduction is goodwill could draw against total equity of the company on the asset side of the balance sheet,and put WCOM in violation of debt covenants. Over stating book value IMO is a major concern....but that will all depend if that was done to avoid getting trouble with debt covenants.In which, if thats the case, WCOM could be toast, and all that is involved.
But the operative word would be, was it "Deliberate" .....again just speculating, as no one really knows what is going on except the insiders.
But its interesting to note that alot of this was already known by WCOM, and the SEC has been notifying them for awhile on this stuff, as stories of such are beginning to make their way around from various sources. Might explain why Ebbers and crew didnt seem really bent out of shape on this, and are more then willing to talk about it...and then posting of the SEC documents on the website as soon as it became a news item.
Guess we,ll have to wait till after March 20 for the response dead line the SEC set for them.
So the net result of all this is simple: They come out of this without any major violations, the stock recovers quickly.
If and they are guilty of major infractions, WCOM tanks, and then the markets will get more nutty then they already are,as investor confidence will be shaken even more after the Enron and GX fiasco.....and this we dont need!!
And after TTWO...i didnt expect to face this again so soon,LOL!
Oh well, thats life in the big city.
Took a chance, bought more WCOM at 7.35, and also purchased some June 7.50 Puts for a hedge.
AI
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