Inside Fumbled Facebook Offering [WSJ]
Less than three days before Facebook Inc.'s initial public offering, Chief Financial Officer David Ebersman decided to boost the number of shares the company would offer investors by 25%, said people familiar with the planning. His main adviser at lead underwriter Morgan Stanley assured him there was plenty of demand, they said. That decision by the 41-year-old Facebook executive may have doomed any real chance the social-networking company had that its stock would jump on its first day of trading—a hallmark of successful IPOs. On Tuesday, the second full day of trading, Facebook shares fell $3.03, or 8.9%, to $31, after falling 11% on Monday. Investors are blaming the downdraft on the last-moment expansion of the offering.
Does Facebook Still Deserve an "A" for Its Financial Reporting? [GOA]
The short answer: yes.
More Finance Chiefs Willing To Pay Bribes, Global Survey Finds [Bloomberg]
Fifteen percent of chief financial officers around the world are willing to make cash payments to win or retain business, according to a survey of executives interviewed by the accounting firm Ernst & Young LLP. The firm’s annual “global fraud survey” of 400 finance chiefs, interviewed from November to February, found a greater tolerance of bribery compared with the previous year, when 9 percent said they would make cash payments. Five percent of CFOs said they would misstate financial performance, while 3 percent said that the year before, according to the survey. “One of the most troubling findings of the survey is the widespread acceptance of unethical business practices,” according to the survey released yesterday. “It is particularly alarming that respondents are increasingly willing to make cash payments” and misstate results to survive an economic downturn.
CBO: Recession in 2013 unless Congress acts on fiscal issues [OTM/The Hill]
FYI.
CEO Sought Nod for Romance [WSJ]
At the recent annual meeting of medical-device maker Stryker Corp., Chairman William U. Parfet puzzled attendees when he began with a brief statement about former Chief Executive Stephen P. MacMillan, who was pushed out two months earlier. "Just to clarify, on behalf of the board of directors, we'd like to clearly state that Steve never violated any company policy nor any code of conduct," Mr. Parfet said at the meeting April 24. It wasn't clear why he made the comment—Stryker had said in February that the CEO was leaving for "family reasons"—and Mr. Parfet didn't explain. The circumstances, pieced together from interviews with people who had direct knowledge of the events, offer a cautionary tale about how an office romance and resulting concerns about credibility could bring down a well-regarded CEO.
Six years after beginning a project to overhaul lease accounting, the U.S. Financial Accounting Standards Board and London-based International Accounting Standards Board, which sets accounting rules for more than 100 countries, are still struggling to craft a joint standard that would bring some $2 trillion in lease obligations onto corporate balance sheets. The two boards have made aligning lease-accounting standards a top priority, because it would give investors a more complete and consistent view of a company’s obligations. But they might have to go back to the drawing board for the second time in less than a year if they can’t begin to agree on a joint approach at a meeting this week in Norwalk, Conn.
A group of 60 members of Congress, led by two CPAs turned lawmakers, have written a letter to the Financial Accounting Standards Board warning of “disastrous consequences” for American businesses and the real estate industry if FASB’s proposed changes in lease accounting standards are approved. The letter, from Congressmen Brad Sherman, CPA, D-Calif., and John Campbell, CPA, R-Calif., along with 58 other members of the House from both parties, urges a careful rethinking of the proposed rule changes, which FASB has been working on with the International Accounting Standards Board as one of their four remaining priority convergence projects. “As one of only a few certified public accountants in Congress, and a co-founder of the bipartisan, bicameral Congressional CPA and Accountants Caucus, I have a unique understanding and the utmost respect for FASB’s independent process for developing sound accounting standards,” Sherman said in a statement. “That’s why I helped lead this effort in Congress to make sure that FASB carefully considers the potential consequences of this proposal.”
The man, who told police he thought the person he hit was a grown man, was watching "Titanic" in 3-D with his girlfriend and had asked the people sitting behind to quiet down and stop throwing popcorn, but they laughed at him, he said. "I got so mad that it just happened," Yong Hyun Kim, 21, told police who arrested him the night of April 11 at the AMC Kent Station 14, in Kent, a south Seattle suburb. The 10-year-old lost a tooth and had a bloody nose in the confrontation.
