Word: stocking
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Dates: during 2000-2000
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...continue to raise rates? The Fed plainly is paramountly concerned that rising stock prices are creating such a glow around the nation's dinner tables that a family spending barrage is about to render household goods scarce and send consumer prices spiraling through the roof. It's an interesting theory. It's also a leap that could shut down the expansion prematurely and tarnish Greenspan's sterling reputation--potentially derailing Al Gore's presidential train, much as a weak economy did George Bush...
Last week the rules snapped back with a vengeance when MicroStrategy, a supercharged Vienna, Va., software and Internet company, was forced to restate drastically results it reported in 1998 and 1999. MicroStrategy's stock, which had risen like Icarus--from $7.34 to $333 over the past 12 months--suddenly fell from the sky, losing more than 60% of its value in a single day. More than $11 billion in market value was erased, and the company's brash chairman, Michael Saylor, 35, personally lost $6 billion in paper wealth in less time than it takes to say overvalued dotcom. "There...
...accounting fiasco broke a long winning streak. His company, founded more than 10 years ago, sells software that allows firms such as American Express and K Mart to mine the masses of sales and other data they collect to better target customers. MicroStrategy went public in 1998, and the stock took off after the creation of Strategy.com a unit that beams custom-tailored information to subscribers of clients like Ameritrade, the Washington Post and the Wall Street Journal. This month, Saylor announced a $100 million charitable scheme to launch an "Internet university." He says these plans haven't been changed...
MicroStrategy's reversal stems from a practice endemic in dotcom-land--overstating revenues. In the Internet twilight zone, where profits rarely exist, evaluating complex revenue streams can turn more on esoteric judgments than on accounting canon. The right outcome can add billions to a company's stock-market value. "It's a dangerous and uncertain game," says Howard Schilit, president of the Center for Financial Research and Analysis, a forensic accounting firm that issued two early warnings on MicroStrategy. "You know your stock could be dead meat if results are a couple of cents short, so you may sit down...
MicroStrategy's pain extended beyond its stock-market valuation. The firm canceled a planned $1 billion new-stock offering. That will at least temporarily restrict the company's access to capital, not to mention Saylor's. He had planned to sell shares worth hundreds of millions as part of the offering. Although the stock recovered more than a third of its losses as of last Friday's close, he's now down to his last $5 billion...