Betting on our stupidity…

October 8, 2004

You’d think that companies would stop playing games with their options expenses, given all the attention stock options have gotten recently. But you’d be wrong. Take Palm One (PLMO), for example. In the company’s recent Q, it reported quarterly earnings of 41 cents a share, a significant turnaround from the 74 cent loss they reported for the same quarter last year. News accounts, like this one by Reuters hailed the solid results. But the Q tells a slightly different story. Once options expenses are factored in, the company only made 29 cents a share, which (of course) is still better than a loss. But digging even deeper into the numbers, you see that to get to that 29 cent figure, the company monkeyed around with the options assumptions it was using. The moral here? Many companies are still betting on investors turning a blind eye to the things they try to bury in their SEC filings.

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