Tesco Shares / False Accounting.

sabretoothtigger

I pencilled in 180 for Tesco and keep reading for signs they doing better, it is possible

puk999

Tesco have long been predicting the fall in their share price:

brendon

poodle7 wrote: »

Surely shareholders may find they will be in good a position to file a lawsuit against the company

You are the company. "Shareholder" -- the clue is in the name.

gkerr4

brendon wrote: »

You are the company. "Shareholder" -- the clue is in the name.

not really though.

they are just tradeable assets - i was going to say bits of paper, bu tnot even that any more.

you have no stake to the company, just a small % of the earnings.

Thrugelmir

Glen_Clark wrote: »

'False accounting' is putting it a bit strong. Supermarkets receive payments from suppliers if they hit sales targets (as an incentive to stock or promote their goods)

Suppliers pay for shelf positioning, it's called a slotting fee. My assumption is that Tesco's may have been booking this commercial revenue early. Thereby boosting declared profits.

As with any manipulation of this kind. Works fine until the revenue stream changes materially for some reason. Then an enormous hole appears in the accounts. As maybe the case now. After a bad year the financial results will normalise again.

Not fraud as such. In many companies declaring the highest possible profit is a primary objective. The new CEO has spent many years at Unilever so will know the game from the other side of the fence.

If the shares drop another 5% may be worth considering buying.

kidmugsy

"to file a lawsuit" sounds to me like American jargon. Maybe you should try your luck there - they seem to have a copious supply of bent judges and dim juries.

brendon

gkerr4 wrote: »

you have no stake to the company, just a small % of the earnings.

Where did you get this idea from?

gkerr4

brendon wrote: »

Where did you get this idea from?

its the way it is - do you really think you have some magical entitlement to any of the assets of the company?

shares are just for trading - thats all - you get a share of the profits in the form of dividends.

eskbanker

gkerr4 wrote: »

its the way it is - do you really think you have some magical entitlement to any of the assets of the company?

shares are just for trading - thats all - you get a share of the profits in the form of dividends.

So who actually owns the company if not the shareholders?

What they can realistically do to exercise their rights is another story (and obviously the influence of tiny small holdings is practically negligible) but surely it's unarguable that a company shareholder holds a share, aka a stake, in the company?

Thrugelmir

gkerr4 wrote: »

shares are just for trading - thats all - you get a share of the profits in the form of dividends.

If the assets were liquidated and all debts paid off. Then it's the shareholders that receive the capital that's left.