yes...high stakes poker..on UAL and TYC....
at 3.75 and 7.95........but they looked
kinda cheap to me there last thursday when
I posted .....and talk about beat up....they were.....
but I cannot disagree with your assessment:
that you wouldn't touch either with
a ten foot pole.........and at higher prices
I wouldn't either.....
best to you, bdparts
When the gut tells you that the accounts could be very materially inaccurate, then yes, it is rational.
You have here an extremely wealthy man who would falsify purchasing and shipping documents to save a few bucks in taxes. An irrational act would be to assume that the books he filed on the very source of that wealth were as pure as the driven snow.
I have absolutely no intention to buy, so I wasn't 'discomforted' in the least. However, I wouldn't characterize anyone expressing doubts as to the veracity of reported results for a company lead by such a person, as being driven by 'unrational' fears.
>>maybe be only properly be qualified as unrational fear ? <<
Apparently you found the sight of the CEO being hauled away in cuffs as somehow comforting.
Have you anything substantial to share with us about Tyco's accounting improprieties or does it only amount to some unquantifiable feeling that could maybe be only properly be qualified as unrational fear ?
>>> However, it seems from Emersons article that LVLT is really screwing the public shareholders. <<<
It was a pretty comprehensive statement of the issues and it makes some good points that I hope Level 3 management takes seriously. It was reported that benkea handed a printout of this article to the Level 3 BoD at the meeting yesterday!
However, the article makes certain worst-case assumptions that are extremely unlikely. I think the actual dilution will be less than he reports, and Level 3 management agrees. The numbers he uses are strikingly similar to benkea's, so I think the OID editor has been getting some of his info from ben and the LVLT message boards. Which may not be the best source of unbiased information.
The proxy vote passed by about 83% to 16%. If it was really out of whack I would think the vote would be closer.
>>> I also found it obscene what CEO of RCN is doing to its shareholders. <<<
It depends on your perspective. RCN is not a healthy company and they are having a lot of trouble. I am not sure what you're referring to, but if it is the stock compensation plan, they are still a long way from making any money (strike price at the last round was $1.95). Yes, the options were repriced, which isn't particularly fair. But the company is still in essence a startup, with its business plan and capital structure in constant flux. That $1.95 is still a tall hurdle IMHO. My opinion is that shareholders should have known that they had to be very careful, and they should have expected more dilution.
>>> From the discussions on this board, I always thought LVLT management was upfront with its public shareholders.
This article paints a totally different picture. <<<
IMHO there is one scale which is the "options dilution" scale. Cisco and Dell are on one end and Berkshire is on the other. Level 3 is somewhere between. IMHO they are closer to Berkshire because they report their options as an expense and publicly report the intended and actual dilution of shareholders.
Another scale is management compensation. Eisner is on one end and Berkshire again is on the other. Level 3 again is somewhere between. Level 3 execs haven't made much of anything from the company over the past 7 years either in the form of salary or options. This is comensurate with past performance. However they are going to gain disproportionately over the next few years. That is not great but in the grand scheme of things is a small offense IMHO. As Buffett and Munger have said about executive compensation, generally it's too high but as shareholders we have to put up with it unless it's totally ridiculous. Level 3's isn't totally ridiculous to me.
Another scale is management honesty. Enron, WorldCom, Qwest, and others are on one end, and again Berkshire is on the other. Level 3 is very close to Berkshire on this scale. Even though they are set up to make a lot of money, and they've made some mistakes, they've been very very honest about everything that has happened.
In the recent proxy, management voluntarily waived the right to exercise the options that were granted to them last year. Perhaps they will be "unwaived" in the future, but they did this without prompting.
When investing you have to look at the whole picture. You could say that one executive is getting paid too much in one year and decide to sell your investment because of that. But that is throwing out the baby with the bathwater IMHO.
Also people tend to get irrational and emotional about this issue with Level 3. There is a lot of misinformation floating around and some pretty wild assumptions. If you make wild assumptions, you can turn Berkshire into a lousy investment too. Like everything else, some common sense and patience goes a long way.