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EssentialThe Essential Conversation

Stephen Clapham on IPO Bubbles, Earnings Manipulation, and Balance Sheet Jiggery-Pokery

Featuring Stephen Clapham

Dec 17, 2020 • 60 minutes

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Essential

The Essential Conversation

Stephen Clapham on IPO Bubbles, Earnings Manipulation, and Balance Sheet Jiggery-Pokery

Stephen Clapham analyzes the current ploys that companies use in order to flatter earnings, garnish cash flow, and hide risk.

Featuring Stephen Clapham

Dec 17, 2020 • 60 minutes

Real Vision editor Jack Farley welcomes Stephen Clapham, founder of Behind the Balance Sheet and author of "The Smart Money Method." Using the tools gained as a forensic accountant in the hedge fund business, Clapham analyzes the current ploys that companies use in order to flatter earnings, garnish cash flow, and hide risk. These hijinks include one-time charge-offs, stock-based compensation, and the widespread practice of listing "adjusted earnings" – the holy grail of financial chicanery. Clapham considers the flurry of IPOs and SPAC mergers, which he calls a "bubble," sharing his views on companies such as Nikola, Airbnb, and DoorDash. Clapham's article on stock-based compensation can be viewed here: https://www.behindthebalancesheet.com/blog-1/stock-based-comp-the-disappearing-expense. Filmed on December 15, 2020 Key learnings: IPOs and SPAC deals are in a bubble that reminds Clapham of the dot-com crash. Investors should be wary of adjusted earnings, but since almost every company in the S&P 500 employs that metric, research and prudence is required to separate the wheat from the chaff. Show More

The Essential Conversation is the world's premier financial-market-focused conversation series. The smartest people in markets, finance, economics, and business engage in deep-diving discussions about the global macro landscape, generating actionable takeaways that can help your decision-making process. Tune in to peer-to-peer conversations between the brightest minds in the investing world, and tune up your portfolio.

More Episodes

The Essential Conversation is the world's premier financial-market-focused conversation series. The smartest people in markets, finance, economics, and business engage in deep-diving discussions about the global macro landscape, generating actionable takeaways that can help your decision-making process. Tune in to peer-to-peer conversations between the brightest minds in the investing world, and tune up your portfolio.

More Episodes

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