Return to Transcripts main page
CNN Live At Daybreak
SEC is Investigating IBM's Accounting
Aired June 03, 2003 - 06:17 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time for a little business buzz now, though. IBM is facing an investigation into its accounting practices. Let's get details on that live from New York and Susan Lisovicz.
And this can't mean good things for the market.
SUSAN LISOVICZ, CNN FINANCIAL NEWS: Oh, no. No, not when it's a Dow 30 company like IBM, one of the best recognized, most recognized companies in the world. But IBM, also known as "Big Blue," says the Securities and Exchange Commission has launched a formal investigation into its accounting practices, which means the SEC now has subpoena powers to obtain documents from the company. The SEC looking into the way the company booked revenue from customer transactions in 2000 and 2001.
IBM is the world's largest computer company, but the focus of the probe is believed to center on its cash registers, electronic cash registers, and other what are called point-of-sale products for retailers. This is perhaps the third time in the last few years, Carol, that the SEC has been looking into IBM's accounting practices. And just to reiterate how big IBM is, it ranked No. 8 on the most recent Fortune 500 list with sales of $83 billion last year.
COSTELLO: Oh! So upsetting for stockholders. The Dow actually broke 9000 yesterday, and then it fell.
LISOVICZ: Yes.
COSTELLO: And you just have to wonder how big an effect this will have on the market today.
LISOVICZ: Well, it's certainly been a big effect on IBM. We saw it fall more than $2 in after-market trading. That's when word got out to the Street, and it's down in pre-market trading. Dow futures are lower right now as well, and, of course, it's one of the Dow 30 stocks that make up that index.
Some analysts saying that this could have an effect on investor confidence, which has already obviously been shaken with the Enron and WorldCom accounting scandals, and a lot of people were hoping that we had really turned that page -- Carol.
COSTELLO: Yes, every time we take a little step forward, there is something to slap us back there.
All right, Susan Lisovicz, we'll get back to you in the next half-hour, many thanks. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Aired June 3, 2003 - 06:17 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time for a little business buzz now, though. IBM is facing an investigation into its accounting practices. Let's get details on that live from New York and Susan Lisovicz.
And this can't mean good things for the market.
SUSAN LISOVICZ, CNN FINANCIAL NEWS: Oh, no. No, not when it's a Dow 30 company like IBM, one of the best recognized, most recognized companies in the world. But IBM, also known as "Big Blue," says the Securities and Exchange Commission has launched a formal investigation into its accounting practices, which means the SEC now has subpoena powers to obtain documents from the company. The SEC looking into the way the company booked revenue from customer transactions in 2000 and 2001.
IBM is the world's largest computer company, but the focus of the probe is believed to center on its cash registers, electronic cash registers, and other what are called point-of-sale products for retailers. This is perhaps the third time in the last few years, Carol, that the SEC has been looking into IBM's accounting practices. And just to reiterate how big IBM is, it ranked No. 8 on the most recent Fortune 500 list with sales of $83 billion last year.
COSTELLO: Oh! So upsetting for stockholders. The Dow actually broke 9000 yesterday, and then it fell.
LISOVICZ: Yes.
COSTELLO: And you just have to wonder how big an effect this will have on the market today.
LISOVICZ: Well, it's certainly been a big effect on IBM. We saw it fall more than $2 in after-market trading. That's when word got out to the Street, and it's down in pre-market trading. Dow futures are lower right now as well, and, of course, it's one of the Dow 30 stocks that make up that index.
Some analysts saying that this could have an effect on investor confidence, which has already obviously been shaken with the Enron and WorldCom accounting scandals, and a lot of people were hoping that we had really turned that page -- Carol.
COSTELLO: Yes, every time we take a little step forward, there is something to slap us back there.
All right, Susan Lisovicz, we'll get back to you in the next half-hour, many thanks. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
