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davis merritt

Re Davis Kesmodel's fear that online news operations may have less revenue and thus smaller staffs: that is likely and is OK. Newsrooms typically represent only 10 to 15 percent of a newspaper's costs. Newsprint, production, presses, distribution represent the great majority of other costs, reflecting a big chunk of revenue that won't be needed once the technology is fully migrated. So less revenue is not a long-term barrier to preserving newspaper journalism in it new forms.
The problem for now is that newspaper companies think of newsroom expenses as variable thus controlable costs, and the production-distribution costs as fixed or sunk. So when sort-term profit pressures arise, newsrooms are reduced. Therein lies the threat to successful migration to new models. Companies determined to protect newspaper journalism through these tough times must come to consider newsroom costs as the truly fixed costs in terms of long-time franchise protection. The production "fixed" costs are the ones that can be trimmed by moving faster toward online emphasis.--Davis Merritt


Actually there are many reasons for Chanos to want to publicize the fact that he was shorting Enron's stock. If he shorts, he's betting that the price will fall. If people believe the price will fall they could begin to sell their shares, which then causes Enron's stock price to fall. Hence, a self-fulfilling prophecy


I am reminded of Steve Martin's "How to be a Millionaire and Never Pay Taxes." He outlined his two-step plan:
1. Get a million dollars.
2. Don't pay taxes.

And, if the IRS comes after you, just say "I forgot."

If I find out that my employer accidentally send the IRS imcomplete information about my earnings that result in a tax windfall, well, is it a mystery, or a puzzle? The IRS has the information, it's "out there." But if someone down the line figures it out, I don't her to say "I forgot." I owe whatever I was supposed to owe. The government prosecutors may decide that I genuinely forgot and not throw me in Mr. Skilling's cell.

However, Mr. Skilling did not forget. He knew that his (Enron's) numbers were being misinterpreted (partially by his/Enron's sleight of hand, partially because investors wanted it to be true) and didn't correct it. He took the money that the equivilent of my tax error brought him/Enron.

Am I missing something? And this isn't even assuming that they cooked the books...this is just if they know they're overpriced and that their income is being misstated in the papers.

Sean Carman

A small point about Jonathan Macey's claim that Enron represented "receiver failure," that is, "[i]t was also the case that those who were supposed to be listening to and interpreting those signals didn’t do their job."

I could be wrong, but I think this kind of statement confuses two distinct concepts. There are two kinds of investors, the sophisticates -- funds and firms with analysts who pore over financial information in detail -- and individual investors, people like me who have a Schwab account and maybe buy a few shares now and then based only on readily available information.

Macey's analysis, I believe, only deals with the former, and doesn't concern itself with the latter. Or, rather, his analysis assumes that every investor belongs in the former category. He doesn't account for ill-informed investors, or those who have to rely on a company's own public statements about its finances. This, anyway, is the impression I get from his law review article.

But if you focus on the individual investor, whom the securities laws are in large part intended to protect, and in whose interest the Enron case was brought, Enron no longer becomes a case of "receiver failure." Rather, it becomes a case of a corporation lying to its investors by withholding critical information from them.

I think it's important not to conflate these two issues. Enron was a case of "receiver failure" only in the case of those sophisticated investors who didn't read the tea leaves properly.

One could reasonably ask: should any investor be placed in the position of having to decipher complicated financial statements, even a so-called Wall Street sophisticate?

In the case of the insider auditors, Macey himself makes the point that they easily become co-opted by their own conflicts of interest.

So, as to them, it isn't difficult to understand why they missed what they were supposed to be looking for.

Again, Malcolm, thanks for entertaining an interesting discussion, and soliciting these comments on your blog.

bob Smietana

"Follow the money." Isn't that what Deep Throat told Woodward and Bernstein. So how can a major corporation pay no taxes, have no cash flow, and no one notices?


A lot of bitterness and pretense in this thread, but so far nothing more compelling than the New Yorker piece itself.

My dad always said that any story you have deep knowledge about will contain at least one error. My experience as a reader and reporter have born this out. Fine. Gladwell may have missed a couple of things. We are talking about one of the most complex business stories in history.

What's mostly going on here, however, is the resentment of the blogging class toward those whose work is printed on "dead trees." It's a boring meme, and I hope we're


Another thought... On a superficial level, I agree that the Enron mess (and I lost no money, for what it's worth) could be categorized as a "mystery."

But, again, intent is important. I thought it was interesting that the average documents associated with an SPE run about 20 pages, whereas the Enron papers averaged closer to 1,000 pages. A needle in a haystack may also be a mystery and not a puzzle. But if someone INTENTIONALLY hides one there, that context is pretty important. There is an assumption of truthfullness in SEC filings... And while the "truth" was included in the filings, it was hidden among a lot of other stuff, perhaps put there intentionally. Telling the technical truth doesn't cut it for me, they were telling everyone the truth in the sense that if I say I make a little less than a "Million a Year," I could be talking about pesos. If I expect others to determine what the denomination is, well, is that "receiver error"? Maybe. But my intent is that people would misinterpret my words.

Sean Carman

OK, I've finally read Mr. Gladwell's New Yorker piece carefully, and I think one can fairly make the following critical point.

The premise of Gladwell's article is that Enron's collapse presented a "mystery" rather than a "puzzle," in the sense that Gladwell uses those terms. Setting aside the questionable nomenclature (aren't all unknown matters "mysteries" until we figure them out, at which point they become "puzzles"?), Gladwell's claim is that mysteries are complex matters that can be solved not by the discovery of a hidden fact, or a key piece of information, but by the careful analysis of information that may well already be public.

Enron is a mystery, we are told, rather than a puzzle, because Weil at the Wall Street Journal, and Macey's students at Cornell (Macey was at Cornell before he migrated to Yale), could discern Enron's precarious financial position from its public SEC filings.

Thus what we assumed to be a case of fraud -- that is, a puzzle -- was really a case of the public not realizing the import of certain public information. That is, a mystery.

The conclusion is that we don't need more rules dictating the truth of corporate public statements, but rather we need, as Macey is quoted as saying, a set of financial intermediaries as sophisticated in receiving, processing and interpreting financial information as the companies are in producing it. Like the "batty geniuses" who
discerned the V-1 rocket from German propaganda, these intermediaries would presumably pore over public financial statements and quarterly reports to determine the true value of a company.

It's an entertaining story but, alas, it's wrong.

The key to understanding why, I think, is to understand that the prosecution's case against Enron, and Jonathan Macey's law review article, are concerned with two separate and distinct things.

The Enron prosecution was about the company's intentional misrepresentations (that is, its "lies") about its finances. It listed money it borrowed as revenue. It made false statements about its earnings. It manipulated the energy market. Other commenters in this and the other thread have listed better and more numerous examples than I can.

Macey is concerned about, and is talking about, something else -- whether a company's share price accurately reflects its real value.

These are separate concerns. Think about it this way: In cases like Enron's, the truth always and eventually comes out. You can't sustain a fraud forever. A lot of people, inevitably, and eventually, get burned.

The laws against making false statements to the public are intended to prevent the fraud from getting started. The idea is, if companies are honest, no one will ever have to go hunting through the financials to find the truth.

Of course reality isn't so neat, and so it never works that way. Companies exaggerate in their annual reports, they deliver the bad news in vague footnotes, etc. There are always discrepancies between the financials and the public face of a company. When those discrepancies become eggregious enough, we label them fraud.

It's often possible to discover hints of the exaggeration, or the fraudulent enterprise, in the company's financials. But that doesn't mean there's no point in criminalizing the company's lies, that is, in trying to stop the fraud from ever happening in the first place.

Gladwell seems to be saying that because it was possible, somehow, to get a whiff of the Enron fraud in certain publicly available documents, the Enron trial was a sham. The dupes who invested so heavily in Enron -- who appear in Gladwell's piece as the spiteful Greek chorus at Skilling's sentencing -- should have been reading Enron's financials. Or someone should have been reading the financials for them.

But this misunderstands the problem, and gets the solution backwards. The problem was not that more people should have been fine-combing Enron's books. The problem was that Enron was lying to anyone who listened.

And the solution is not to build a new army of nit-pickers and financial analysts. The solution is to punish the liars, to stop them and deter others from doing the same thing.

There is, finally, as I said in the other thread, the beginnings of a pernicious ideology at work here, although only the beginnings, and I assume it's unwitting. I don't think Gladwell intended to promote a right-wing law and economics ideology, I just think he's been lured by Professor Macey into espousing one.

Near the conclusion of Gladwell's piece he says, "if you can't find the truth in a mystery -- even a mystery shrouded in propaganda -- it's not the just the fault of the propagandist. It's your fault as well."

But if a company lies to its investors about the state of its finances -- if it deliberately misleads the people to whom it communicates -- should we have to accept ANY of the responsibility for those actions? And if so, why? That's the "you should have known I was cheating you defense," and the law doesn't recognize it in fraud cases, for good reason.

And even if you did arm a generation of "information intermediaries," and send them out to hunt and pick through a company's SEC filings, who would benefit from their findings? Wouldn't that just create a secondary market for the conclusions their studies would generate, and a new incentive for more sophisticated instances of fraud?

Isn't the most direct solution to see the Enron debacle the old fashioned way? As an instance of fraud, best dealt with by sending those guilty of defrauding the public to jail?

Tom B

When you say "We" are dismantling the institution, who is the "we?"

My guess is that the "we" are "the people."

Does that change things?


OK, I’ve taken the chill pill, and waited 24 hours. Now allow me to explain why I think your Socratic Method in this debate is flawed. You work on the assumption that “the laymen” don’t fully understand how complicated matters work, is, for me, at the core of the problem of reporters like you.

I didn’t make an off-hand remark on another post about your stereotyping of Oklahoma businessmen as a personal attack (A brief digression: I suggest you fly back to Oklahoma and speak to, say, the guy who founded a large company called Creative Designs, who sold his business to a group of New York football-watching investors that proceeded to drive the company into the ground – this man, one of Oklahoma’s richest entrepreneurs, builds art galleries and hosts exhibits and doesn’t watch football. Touching down in a place doesn’t make you an expert. It’s like David Brooks writing from DC about life in the Midwest, as if he knows anything about it because he went into a Home Depot once.)

The strategy of your “semi-defnese” exemplifies your condescending perception of “the layman”. Hence you are “just askin’” if somebody can explain in simple terms what Skilling was convicted of, as if it takes a financial journalists to interpret Skillings’ illegal action.

I find that to be reflective more of your view of “the layman” than anything that has to do with Enron. We plebeians know why Skillings is a crook. Every hillbilly Texas Enron employee who was “oh-so ignorant” of what was obvious to intellectuals such as yourself in fact knows exactly why their pensions were wiped out. They trusted the system would prosecute such frauds before they took place. They were wrong, but they, as well as anyone one the unwashed mass that gave a lick of attention to the Enron debacle, is aware of the numerous counts of illegal fraud (as opposed to the legal kind, where special interests groups give legalized bribes to politicians for custom-designed line-items in unrelated pieces of legislation – yes, we plebeians are aware of that, too).

Perhaps this article was once of your blink-like decisions, which, if you think about it, might be an argument for more carefully thought-out strategies for making contrariwise points in a lame attempt to portray yourself as objective.

all dig down

Just having finished reading Joe Nocera's criticism, I looked for your blog. I was (and am) torn between wanting to defend you for your fresh perspective (I haven't read what Jonathan Macey has written about this subject) and attacking you for your oversimplification of things which gives rise to the attacks here in the Comments on your blog.

For the last 15 years I have been a very vocal advocate of better disclosure, but have argued that the most important disclosure is voluntary. Every company buries important information in their footnotes. That can not be judged on the same basis as lying, which Skilling was found guilty of. But what interests me here is the gray area in between outright lying and manipulation. And even more than that, I'm interested in how various audiences respond to their responsibility to dig down into the small print to find information that hints at the bigger picture. Another way of saying that is that I am curious about how different members of society either look for the truth or become part of a collective hysteria in avoiding the truth.

With Enron there were many signs, well in advance of mistruths, things that were suspicious. It was a period of excess and Wall Street was as much at fault as it was responsible for this erosion of morality (often associated with periods of boom) or selective truth seeking.

The same thing is happening now in this second dot.com explosion. MySpace is a perfect example. The purchase by Newscorp (Rupert) of a company that has made its fame and reputation by blatantly ignoring copyright law (stealing from artists and songwriters) has created a tremendous contingent liability. This is in plain view. And yet no one is looking. When Google acquired YouTube they put aside $500 million (or something on that scale) for future litigation related to copyright infringement. They have essentially admitted to illegal practices! And yet both MySpace and YouTube are heroes to their users, Wall Street and the press. What will it take for the mass public, as well as journalists and the financial community, to wake up to what might be an even bigger theft in the making?

Back to the present: 1) stealing is bad and illegal, 2) it is the responsibility of individuals and institutions to discover theft and punish it, 3) the population, including Wall Street, often become so caught up in the hype, fueled by the press, that they become blind to what is going on around them. Enron was a real life drama, but one that should serve too as a cautionary tale.

Tony Kondaks

Just got my copy of The New Yorker in the mail yesterday and finished the brilliant piece this morning.
The moral of the story? Anyone willing to roll up their sleeves and do their homework would have realized that something was amiss. As John Houseman used to say in that old Smith-Barney TV commercial: we make money the old-fashioned way; we EARN it.
Mr. Gladwell's piece should be contrasted with John Cassidy's article "The greed cycle" which appeared in the September 23, 2002 edition of The New Yorker which, basically, concluded the OPPOSITE: that there should be MORE controls and restrictions over corporate America (in this case, stock options). Mr. Gladwell, of course, is saying that it was all there to see for those that went to the trouble of investigating it and Enron was more than willing to tell anyone anything they asked.
I wrote about Enron back in 2002 and said pretty much what Mr. Gladwell is saying today:


So a jigsaw *puzzle* is technically a jigsaw *mystery*. Right?



There's a huge difference between "savvy investing" and pushing mom and pop into a system of 401Ks. The system is designed to obfuscate precisely so that people like Skillings (and media apolgists like Gladwell) can snake through the legalese. The rich don't get rich on capital gains by poring over company reports any more than those poor working class schlubbs "can only blame themselves" -- the rich hire people with accounting degrees to do it for them.

I think there's a huge difference between investing in capital gains, and being forced by the law of the land and the trends in government into 401K schemes.

It's one reason why I've always felt that the platitude "more Americans than ever before invest in the stock market" is a big fraud. In one way it's true (because there are simply more Americans, duh!) but it's also only been in recent history that workers have been forced into owning stocks through a system that is gradually privatizing entitlements.

Had Bush had his way, more workers would have been pushed to relying on the same firms that covered up Enron's losses for their retirements.

Trying to say that Skilling is a pariah is pretty irrelevant.

If the MSM wants to do it's job, ask some serious questions. Here's one: explain to me in simple terms why a gauze bandage costs $40 on my hospital bill.

Answer that question, and you will actually help the country instead of yourselves through your contrariness for contrariness's sake style of so-called journalism.

bob weisberger

1. The fact that a deliberate misrepresentation is discoverable to an astute observer does not make it a non misrepresentation. The officers of a company are responsible to their employees and shareholders to maintain a financially sound enterprise free of shenanigans which enrich management but are doomed to failure and ruin for the company.

2. Why is no mention made in this "semi defense" of the deliberate manipulation of the California energy market(most damnably demonstrated via audiotapes in the documentary based on Joe Nocera's book)? Our most populous state and one of the top ten economies in the world was paralyzed by Enron traders who took electricity plants offline to artificially decrease supply and drive up revenue. This alone, apart from everything else, was egregious enough to warrant the prosecution and convictions. Malcolm - would you not agree? An enormous state was deliberately (and, it appears from the tapes, gleefully) shut down - is that not a significant enough crime?


Angelo - To answer your bandaid question

1. Because they can
2. To cover the hospital's fixed and variable costs (infrastructure, nursing,energy etc) the hospital sticks ridiculous prices on bandaids and aspirins. It would make loads more sense, certainly PR wise, to simply add a "hospital costs" surcharge to the bill which would more closely reflect the effort and cost involved in caring for each patient. It would still be an enormous amount but would not be as infuriating as being billed $40 for a piece of gauze. Insurers, of course, do not pay, but if you are uninsured you are in big trouble. (Two friends recently had $40,000 hospital bills (for two or three day stays) and insurance paid the hospital, in full in each case, about $3500. No insurance and you would be lucky to get away with a negotiated $20K.)

Tony Kondaks


1) I take issue with your use of the word "forced" when describing employees and 401(k)'s. Correct me if I'm wrong but participation in and contributions to one's 401(k) program is 100% voluntary. The fact that, I assume, 99% of eligible workers participate in their company's 401(k) programs is more a function of our tax system and its ridiculously high marginal tax brackets than any "force" or coersion on the part of employers or government. If I'm in a combined 35% federal/state marginal tax rate, I would be silly NOT to contribute because 35% is what my investment dollar is discounted at (until, of course, I reach 70 1/2 years of age and will take taxable distributions). And a single taxpayer in California earning a humble $40,000 in taxable income is pretty darn close to a 35% combined marginal rate. So there's no "force" involved; it's our tax system that makes it imperative NOT to.

2) Your reference to Bush and privatizing entitlements is an obvious reference to his aborted attempt at privatization of Social Security, all but abandoned. "Had Bush had his way..." you write. Well, Bush's proposal was about the farthest thing from true privatization that one could imagine. Check out point#3 of my article that includes this subject at http://tinyurl.com/v74rr.

3) You ask: "Explain to me in simple terms why a gauze bandage costs $40 on my hospital bill".

The simple explanation?

Only suckers pay retail.

The $40 itemization you see on your hospital bill is NOT what your insurance company pays. Anywhere from 20-50% is knocked off these bills through negotiations between the insurance companies and the hospitals.

Indeed, there is a whole industry that has built up called Healthcare Claims Auditing that does exactly that. I know. I've had experience with my own parents who were Canadian and were Snowbirds. When my Mom got sick, the bill was $80,000 and the Quebec Medicare people would only pay a fraction of it. Her travel insurance paid only a fraction more. Why? Because hospitals overinflate -- purposely -- their invoices.

Check out the following company that does auditing:

This is NOT a defense of the healthcare industry or public policy on the issue. Just a correction of your perception of how things work in the industry. Indeed, what we probably need is MORE free enterprise in the area of health care and LESS government (about 50 cents of every healthcare dollar is already paid by government programs in this country).


The Inquirer needs:

to hire people who can actually design reader-friendly pages.

to move to a tabloid format -- so much easier to read on the train or bus

to start free CD/DVD giveaways

to hire "Star" columnists.

Sean Carman

Joe Nocera's piece in the New York Times is the best criticism of Gladwell's piece in the New Yorker. I don't think I can link to it, because it's behind the Times' Select wall, but you can find it on their on-line business page, among the list of most e-mailed articles. Its title is "Tipping Over a Defense of Enron." You can also find it through a Google search of "joe nocera tipping over a defense of Enron." Look for the cartoon rolled-up newspaper at the top of the page.

One point Nocera makes, among many, is that the financials only disclosed that the company was over-valued. But, critically, the true extent of the fraud, and the fact that Enron had no value at all -- would NOT have been apparent from the financials. Nocera's examples pretty much dispose of the argument it was all a "receiver-information" problem.

Nocera also demonstrates how to be graceful in introducing a devastating critique. The first few paragraphers are a model for blog commenters everywhere.

Joe Rotger

I've been trying to come to grasps with Malcolm's questions, and I can only come up with one simple explanation for these questions: investment inexperience on his part —and a lot of other folks, too.

Schilling was not only unethical, but he did illegal things, like hiding ENRON's losses in companies made of papier-mache fabrications of accounting dellusions.

In regards to his second question, not all investors are alike. As a matter of fact, some are buyers while others are sellers —in essence, at any moment in time they have totally opposite views.

So, I guess the question would be directed more to the unwittingly investors that either... held or bought ENRON shares to the last day of trading: what happened to this group?

In hindsight, we could say that the savy investors were long gone from their ENRON stakes... or shorting them.

...And, that some journalists... well... they were better prepared than the unwitty group which was left holding and buying ENRON stock.

To conclude, it's not Disneyland, and unfortunately, it will never be —there are too many loose or... losing ends...

Victor Appleton

While not an aficionado of the Enron case, I’m a fan of your articles and blogs, and feel compelled to raise certain points in this article. First, Enron’s business model was questioned for years before its failure (e.g. see Peter Fritsch, Wall Street Journal. Dec 29, 1995. pg. C2 “Heard on the street: Size of Enron's big trading operation worries some analysts; Firm says it's misunderstood”).

Second, raising accounting questions / red flags about companies is an everyday occurrence; but it’s admittedly doubly hard when it’s a Wall Street Favorite. For example, among the red flags you note that surfaced analyzing Enron refer to its tax expenses / disclosures, the fact that its operations were difficult to decipher, the use of SPEs and the existence of related party transactions. Save the last, all of these can and have been raised about General Electric Co: its “effective” tax rate is 60% of the statutory rate; its GE Capital Services (i.e. finance business) is a “black box” to most outsiders including many professionally accredited analysts; and it regularly uses SPEs. In addition to its accounting requirements, related-party transactions are also a governance issue and GE’s governance issues surfaced once its CEO, Jack Welch, left and it was discovered only through his divorce proceedings the abnormally large retirement package he was rewarded. A head of a prominent California bond fund manager also questioned GE’s accounting and finances publicly. I can go on about questions of how GE is able to consistently report earnings marginally better than expected and its disclosed dubious assumptions but this should suffice.

To put this accounting “transgression” issue into perspective, Fred Schwed, in his book “Where are the Customers’ Yachts”, borrowed the philosophical question asking “if a tree falls in a forest…” and asks “if a great corporation is toppling over, does it do anyone any financial harm if no one knows that it is toppling over?” In my experience, the answer lies in whether the “toppling” is successfully masqueraded and offset or the entity is “successfully” sold to bailout certain stakeholders.

The point is that NEARLY EVERY publicly traded company is engaged in this practice. Without sounding facetious it’s literally referred to as “the Wall Street Game” on the Street. The only question is the degree a group of managers decides to play. So these accounting questions about Enron can be raised at numerous prominent publicly traded entities today. [For example, I know of one public hazardous waste company that I have reasons to believe (just from reading its public disclosures) is egregiously managing its earnings and masking it with acquisitions while its margins are shrinking by my estimations. Will this Game player face a reckoning? I don’t know. I suspect I’m not the only one who’s asking this question. (NB: I have no long or short position in it but have gotten others out.)]

Messrs. Weil, Chanos and Ms. McLean along with accounting, finance and law academics raised valid points about how Enron played this accounting game. They would have too much work however if they were to analyze, investigate and write reports or make investment decisions on each game player. Hence, the Game will continue.

As an aside, you note that the IRS requires that “you pay tax on income when you actually receive that income”. That is unfortunately an oversimplification. The IRS taxes “phantom income” (e.g. zero-coupon bonds today) and allows deductions for accrued expenses (e.g. depreciation allowances or stock options today). Indeed, the IRS recognizes that US companies attempt to maximize reported (i.e. accounting) earnings and thus the Service in many cases attempts to assess taxes based on these earnings. Doing so however would prejudice the Service against domestic-only public companies and benefit private ones, which usually attempt to minimize reported taxes, and multinationals.

Third, you note that “an S.P.E. is just an accounting fiction”. Say two similar office buildings are respectively owed by Malcolm Gladwell (MG) and Gladwell Properties, Inc (GPI). If MG fails to make his mortgage payments he faces foreclosure and suits against his personal real and non-real properties. If GPI also fails to make its mortgage payments, it faces foreclosure and little concern about further recourse. MG is a personal borrower and GPI is effectively an SPE. The difference is night-and-day. There are various other reasons why SPEs can be very useful and are not merely accounting fiction. Ask any large NYC yellow cab company why it reduces its risk, or at least attempts to, by separately insuring each of its cabs (perhaps in a separate corporation) and he’ll indirectly give you a brief lesson on SPEs.

Thanks for another thoughtful, interesting, if not provocative, article. There are lots of useful and insightful posts on this blog’s topic. I hope this adds further usefulness to you and others.


Speaking of newspapers doing a good job on Enron, here's Joseph Nocera's New York Times column responding to Malcolm's earlier "semi-defense" of Mr. Skilling:


Sean Carman

Here's the link to the Cornell study referenced in Gladwell's article:


There's as much in the report to lead one to conclude that Enron was a safe, albeit risky, investment, but here's the kicker (not mentioned in Nocera's report), from page 13 of the Cornell Report:

The nature of Enron’s businesses requires a significant amount of estimates and assumptions which impact the company’s financials. Nevertheless, both in its exploration and production operations as well as in its financial services operations, Enron uses accounting methods that are in line with industry practice. After close examination
and scrutiny, we have found that Enron’s financials provide an acceptable level of disclosure.


Sean Carman

Sorry, that should have been "good" albeit risky.


This may be a rather facile comparisan, but I can't help but be struck by the scrutiny given on traditional companies' valuations and the total freedom afforded web/web 2.0 companies. How exactly does any company approximate an "accurate" valuation (as posited in your article)? And, in turn, what truths are those valuations meant to reflect about a company or industry?

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