Dell Inc., a supplier of personal computers worldwide is traded on NASDAQ under the symbol of DELL, and in my opinion it sits on the SELL block.
Dell is involved in the design, development, manufacture, marketing, sale, and support of various computer systems and services.
In my opinion, anyone who owns it must dump it and those looking to invest should pass it. I am convinced, because I am now questioning the ethics of its management.
On March 30th this year, Dell announced delay (beyond the due date of April 4th) in filing its annual report for fiscal year 2007 with the SEC due to accounting irregularities. "The Audit Committee's investigation has identified a number of accounting errors, evidence of misconduct, and deficiencies in the financial control environment," Dell reported in a press release. As a result of this ongoing investigation into company's methods for recognizing revenue, the preliminary financial results for fiscal year of 2007 will be restated to reflect necessary adjustments in accounting estimates. The conclusion of this independent investigation can adversely affect the currently estimated numbers and growth between the current and prior year periods (which, even with the accounting irregularities, are strictly OK).
Dell is now expected to file form 10K with the SEC on April 18th providing an explanation for incorrect accounting and financial reports and establishing compliance with all SEC and NASDAQ requirements. I believe investors are still not selling DELL because they are waiting to know about the nature and severity of accounting errors made, which I think is a huge investing mistake. Regardless of what the error actually is (and however big or small it may be), trying to answer such questions will not mean much because an accounting mayhem almost always exposes the weakness of the company’s internal controls over financial reporting and effectively casts a doubt on the ethical functioning of the higher management. When a company starts making numbers, it is being irresponsible towards shareholders and I truly believe it is time to sell.
Bottom line, SELL DELL. When you can't trust the management's ethics, just run - questions about details can (and should) be saved for later.
Dell is involved in the design, development, manufacture, marketing, sale, and support of various computer systems and services.
In my opinion, anyone who owns it must dump it and those looking to invest should pass it. I am convinced, because I am now questioning the ethics of its management.
On March 30th this year, Dell announced delay (beyond the due date of April 4th) in filing its annual report for fiscal year 2007 with the SEC due to accounting irregularities. "The Audit Committee's investigation has identified a number of accounting errors, evidence of misconduct, and deficiencies in the financial control environment," Dell reported in a press release. As a result of this ongoing investigation into company's methods for recognizing revenue, the preliminary financial results for fiscal year of 2007 will be restated to reflect necessary adjustments in accounting estimates. The conclusion of this independent investigation can adversely affect the currently estimated numbers and growth between the current and prior year periods (which, even with the accounting irregularities, are strictly OK).
Dell is now expected to file form 10K with the SEC on April 18th providing an explanation for incorrect accounting and financial reports and establishing compliance with all SEC and NASDAQ requirements. I believe investors are still not selling DELL because they are waiting to know about the nature and severity of accounting errors made, which I think is a huge investing mistake. Regardless of what the error actually is (and however big or small it may be), trying to answer such questions will not mean much because an accounting mayhem almost always exposes the weakness of the company’s internal controls over financial reporting and effectively casts a doubt on the ethical functioning of the higher management. When a company starts making numbers, it is being irresponsible towards shareholders and I truly believe it is time to sell.
Bottom line, SELL DELL. When you can't trust the management's ethics, just run - questions about details can (and should) be saved for later.
