Professor Elam

We have recently studied the income statement in Intermed and earnings mgt in Fin State Analysis.
Here is yet another case as President John Blystone  of SPW apparently  ‘set up’ investors back in 2003-4.  He predicted strong earnings growth which  doubled the stock from 30 to 60. On the way up he sold thousands of shares making a tidy sum.  But it turned out the earnings growth was a one time affair, remember that in comprehensive income, and the stock plummeted over 20% in one day.

I extracted the time period in question, click on the chart to enlarge that wonderful year for Mr. Blystone.  Such a stunt may not be illegal but certainly left the stockholders feeling duped.  The article details other ‘managed’ stunts.  Again this is why we study accounting, to get to, as they say, the bottom of it.  This is also why a fundamental analysts will carefully scrutinize the character and past record of management, leopards don’t usually lose their spots.

DLE