Professor Elam

Ahead of the Tape on page C1 Nov 10 WSJ reports that MSO only makes money on merchandising, publishing and broadcasting are losing money.  Yet the shares are trading at a pricey 82 times earnings, remember the P/E ratio?  Google by contrast trades for 38, other media companies for much less.  There is some speculation of a possible takeover, the stock has shot up on the lack of earnings.  Again, we study accounting to learn the tools to make evaluations about such companies.   Speaking of which

I have mentioned how fierce competition is and how stock prices can fall on good earnings that are not good enough.  Such has been the case for DELL, the darling of our author in the Fin Statement Class.  Their latest travails are on the same page.  Second quarter profit plunged 51%; so now Dell is going to focus on profitability instead of sacrificing price for attempted market share. Well no wonder as HP is inching ahead as both have about 17.2% of the market, but HP is up from a year ago at 16.2%.  A change in such small percentages can mean a big change in firm strategy, and stock price.