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SEC Settles Microsoft Accounting Investigation

Posted by ryuzaki0 on from the cooking-the-books dept.

guttentag writes "The Securities and Exchange Commission has wrapped up its two-year investigation into Microsoft's accounting practices. The investigation focused on "cookie jar" accounting practices in which a company reports that it earned less money than it actually did, secretly storing the unreported money to artificially boost earnings in the future. The SEC called off its investigation in exchange for Microsoft's promise that it will not break the rules in the future, though the company is not admitting that it broke rules in the past. Microsoft publicly states that it has $40 Billion on hand." Gates realized a long time ago that regardless of actual performance, if you "beat estimates" people will buy your stock. So, he's arranging it so that no matter what the actual performance is, Microsoft always "beats estimates". If your analyst estimate is low 61 out of 63 times, either A) you need a new analyst or B) someone is feeding the analyst bad numbers. In this case, probably both.

4 of 277 comments (clear)

  1. Re:It's all Politics by cyril3 · · Score: 1, Flamebait
    The only consolation is that I did NOT vote for Bush.

    You and almost every other American who had the right to vote. And he still got in.

    Isn't capitalism + democracy wonderful. The price of Government gets cheaper the worse it gets cause you don't have to buy as many votes.

  2. Whiny Shits by caspper69 · · Score: 2, Flamebait

    Listen, M$ is in *NO* way like Enron. It's amazing how you zealots place blame. Enron was involved in price fixing and an artificial energy crisis. If I even hear someone say "That's just like MS," then you're too young to remember when an OS used to cost $300. Most people don't even "pay" for Windows.

    I'm not here to argue the merits of M$ software, but I am here to point out that they *DO* create shareholder value, and as a company they perform very admirably. Compared to the stock market and the inflated .COM bust of the past few years, M$ is a blue-chip stock. Forget OSS, forget all M$'s shit... If you were sending you kids to college on their stock, you'd be a happy person...

    Let's put things in perspective here folks..

  3. Good by MisterBlister · · Score: 1, Flamebait
    Microsoft has enough things to worry about without having to deal with this too.

    I'm glad this investigation was dropped.

  4. Re:Does it matter? by NineNine · · Score: 1, Flamebait

    Microsoft stock is worth less than 50% of its value about 2 years ago so it doesn't seem to be working anyway.

    Actually, you stupid, festering pile of shit, if you've been awake any time in the last year or so, you'd realize that being worth 50% of what you were two years ago means that you're one of the strongest players in the tech sector right now.