>The cockroach theory refers to a market theory that states when a company reveals bad news to the public, many more related, negative events may be revealed in the future. Bad news may come in the form of an earnings miss, a lawsuit, or some other unexpected, negative event. The term cockroach theory comes from the common belief that seeing one cockroach is usually evidence there are many more.
I must admit, this is quite exciting. Serious people are starting to ask some questions.
And we already know what kind of answers Elon will give - the same that Wirecard and Enron CEO's gave !
They're being a bit intentionally unclear to not attract the lawyers, but the link to Wirecard makes it clear:
>Wirecard was a German payment processor and financial services provider that collapsed in 2020 amidst a major accounting scandal, revealing a €1.9 billion hole in its finances and leading to the arrest of its CEO and other executives.
i am not an accountant either, but this line stuck out to me as quite important to grasp the overall picture of what the article is getting at:
"Aggressive classification of operating expenses as investment can be used to artificially boost reported profits."
"Aggressive classification of operating expenses as investment can be used to artificially boost reported profits."
The author of this article is Dan Crum a FT journalist respected for his investigations of financial fraud.
Dan Crum was responsible for uncovering the Wirecard fraud.
https://www.ft.com/stream/ffd38f36-a94c-43f7-8a62-2f45caf1be...
The author linking to Cockroach Theory at the end is hilarious
https://www.investopedia.com/terms/c/cockroach-theory.asp
>The cockroach theory refers to a market theory that states when a company reveals bad news to the public, many more related, negative events may be revealed in the future. Bad news may come in the form of an earnings miss, a lawsuit, or some other unexpected, negative event. The term cockroach theory comes from the common belief that seeing one cockroach is usually evidence there are many more.
I must admit, this is quite exciting. Serious people are starting to ask some questions. And we already know what kind of answers Elon will give - the same that Wirecard and Enron CEO's gave !
(The author of this article, is not a random guy)
https://archive.is/0dJR2
I'm not an accountant. What does this mean? Reading the article, it sounded like just sloppy books prep, but again, I'm not an accountant.
They're being a bit intentionally unclear to not attract the lawyers, but the link to Wirecard makes it clear:
>Wirecard was a German payment processor and financial services provider that collapsed in 2020 amidst a major accounting scandal, revealing a €1.9 billion hole in its finances and leading to the arrest of its CEO and other executives.
Plus Wirecard had russian spy COO.
i am not an accountant either, but this line stuck out to me as quite important to grasp the overall picture of what the article is getting at: "Aggressive classification of operating expenses as investment can be used to artificially boost reported profits."