|
|
Major Companies Counting Unrealized Venture Capital Investments To Boost Their Earnings
Chase Manhattan Corp., Conseco, Axa Financial and Mony Group are reporting much stronger financial results as a result of including unrealized gains on securities positions. This is aggressive accounting, and well beyond what Microsoft, Intel, General Electric and others have done that for years, which is to include gains if realized.
Worse still is the fact that the investments themselves may be illiquid or subject to significant price swings. Most analysts have not been fooled. But retail investors may not be so smart.
All four companies are following the advice of their accounting firm (Price Waterhouse Cooper), which the SEC is investigating because the firms' partners have owned stocks in the companies that the firm audits.
Notably, but for counting the unrealized gains, the financial results of the four companies would be mediocre at best. For example, more that 1/2 of Conseco's operating profit (34 cents per share) came from paper gains in one hot telecommunications stock. At Chase Manhattan, 44% of its operating income, or $2.5 billion, came from private equity gains, and $1.3 billion of that was from unrealized gains.
Source: Investment News, March 13, 2000
|
About Us
|
News
|
Alerts
|
Articles
|
Caveat Emptor
|
SNSFE News
|
Contact
|
Search
Register
|
Free Opinion
Sponsored by James J. Eccleston, an attorney representing stockbrokers, financial planners and
investors nationwide in arbitration, litigation and regulatory matters, and a shareholder with the law firm
Shaheen, Novoselsky, Staat, Filipowski & Eccleston
P.C.(www.snsfe-law.com). This Web site contains material
of general interest. It is neither intended to, nor constitutes, either legal advice or investment advice.
Always consult an attorney and/or investment advisor when building and protecting your wealth.
All content Copyright © 2008 Advocate Capital Management, Inc. except where noted. All rights reserved.
20 North Wacker Drive, Suite 2900, Chicago, Illinois 60606
Telephone: 312-621-4400 | Fax: 312-621-0268
|
|
|
|
