Tyco International CEO resigns: Report Kozlowski under tax investigation

I'm a real sucker for these beaten down companies. Without the criminal CEO Kozlowski, this could be a company with some good potential. A little more bad news and a share price of 14 or less, and I may just roll the dice and pick up a few shares. No hurry, better to wait and see what else comes out. You know what they say about cockroaches.

Richard W.

Why don't the Ayn Rander's ever comment on these threads?

OK, I will.

Tyco produces nothing. They are professional middlemen - a holding company that was set up offshore to avoid taxation and navigate excessive government regulations. They are an entity that would never exist under a true capitalist system. It's not surprising that Tyco has attracted a cadre of executives who are looking to "get rich quick", rather than build businesses. Their focus is on evading laws, not creating value.

Anyone know why it dipped so hard at the end of April?

Lack of confidence by investors. Thay altered their strategy (in a major way) twice in 6 months. I don't read Kiplinger's Magazine but here is an exerpt from the April issue entitled, The Next Enron?:

The credit problems and the additional borrowing costs they produced will trim 15 cents off the $3.70 per share that Tyco had previously said it would probably earn in the fiscal year ending September, says Kozlowski. Weakness in electronics could clip profits by another 25 cents per share, and "internal distraction" could shave an additional 5 cents, he warns.
Brett Gallagher, head of U.S. equities for Julius Baer Investment Management, is cautious. Although he believes fears of accounting issues like Enron's are overblown, they still could haunt Tyco: "When access to credit markets is hard to come by, that's a very real expense. It's a case of perception beginning to become reality."
Bottom line: Tyco may be cheap, but until it can persuade investors that its bookkeeping is on the up and up, all but the bravest should stand aside.

I'm sure there were other articles just like this. The whole article is here:

The Next Enron?

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