Monday, December 23, 2002

Lazy Susan

What do you do when you can't make your revenue estimates? Swap! Company A "sells" Company B a basket of intangibles which Company B then repackages and "sells" back to Company A for the exact same amount of money. Both companies then book the "sales" as "revenue." Wall Street used to call these arrangements "Lazy Susans." They were all the rage at places like Qwest, AOL and Homestore, before the bubble burst.

This morning's Wall Street Journal has an excellent report on swaps, which you can read by clicking here. You need to be a subscriber to to access the story.