Nothing we do is ever done with perfection.Accounting is not always correct or incorrect.We never object to disclosure. A good footnote can discuss the issues the facts and the effects on the financials.Restating generates a lot of billable hours and very little shareholder enlightenment. GE restated ,VNO restated and there was no market reaction.How else can we measure the value of disclosure other than to look at the market reaction?
First, qualifiers...I'm not a CPA, not a CFA, and I don't follow either company, but...
It appears that VNO incorrectly applied earning from a one-shot event as operating earnings. This would have the consequence of leading investors to think that FFO and operating earning were higher and thus dividends might be more secure or potentially increased.
For GE, it appears that some of their interest rate hedges did not meet accounting board standards. They have enough sharp finance people to have prevented this. As it turned out, there were no changes to GE's real earnings or cash flow, long term. I think this did influence quarterly comparisons though. Perhaps there was concern about the corporation trying to 'smooth out' earnings or maybe in a different interest rate scenario, the hedges would not have been as effective.
If either company felt strongly enough about this, they should attempt to change FASB rules.
As a private investor, I think it is very positive that these things are brought to light. Now we can all make a more informed decision about these companies. Obviously, no one is suggesting that either company is an accounting Enron. These restatements were the corporate accounting equivalent of a warning for speeding, not reckless driving.
Finally, I appreciate your bringing up issues such as SOX & earnings restatements. The yahoo boards of some of the stocks I own are useless name-calling venues. This one has differences of opinion discussed in a positive way. Thanks.
The rebalancing of the russell 2000 occurs in May or June. Assuming MNRTA has 18,000,000 shares out at $8.50 , MNRTA will have a market capitalization of $163,000,000.At this time you cant tell whether that is large enough to be included.
Although I admire the company, I have taken some small gains and moved on. I am turning away from dividends and income and focusing on a long-term growth and value strategy. I look for companies with little or no debt, dividends, and a consistently high ROE. In ten years MNRTA will probably have been paying dividends of 75, 95, perhaps more than 1 dollar and may have a share price of 10-15 dollars. It's foreseeable.