Financial Statement Analysis by Martin Fridson & Fernando Alvarez

Author:Martin Fridson & Fernando Alvarez
Language: eng
Format: epub
ISBN: 9781118064207
Publisher: Wiley
Published: 2011-05-22T16:00:00+00:00

By apparently claiming that he discovered the true source of his company's year-over-year earnings increase only after the quarterly results had been released, Ribis did not burnish his reputation as a details man. That professed shortcoming may not explain why, seven months later, Trump Hotels & Casino Resorts decided not to renew Ribis's expiring contract as CEO. Perhaps it had more to do with the 56 percent drop in Trump's stock price in the 12 months ending May 2000. One thing is certain, however. Investors who relied solely on the company's disclosure were burned if they bought into the rally that followed the bullish-sounding press release. After analyst Shandell's inquiries uncovered the All Star Café's contribution to third-quarter results, the stock promptly sagged from $4 5/16 to $3 7/8, while the Trump Atlantic City bonds slid from 84 ¼ to 80. On January 16, 2002, Trump Hotels and Casinos agreed to settle SEC charges that it “recklessly” misled investors in this incident, without admitting or denying the commission's findings.7

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