re: #89 Lord Of The Pies

Fiorina worked up the corporate ladder at AT&T, and then at Lucent, and was able to jump over to HP while her actual success at Lucent turned out to be little more than a shell game.

The telcoms borrowed from Lucent so that they could turn around and buy more telcom equipment and fiber. They overbought and overbuilt fiber networks, and in the end, revenues collapsed.

For instance, Fiorina’s mad math skilz had her complete a deal with an obscure company called PathNet. PathNet had all of $1.2 million in sales, but Lucent booked a massive $440 million sale, which could be valued as high as $2 billion. Lucent funded 100% of the purchases, even though PathNet had less than $100 million in equity and hundreds of millions more in loans.

Thus began a debt spiral where Lucent was lending to purchasers so that they could goose sales. It’s very much the same story as Chainsaw Al Dunlap over at Sunbeam, which began booking massive sales figures, only for people to realize that they were selling stuff off-season to retailers who were warehousing it for later sale and using all manner of accounting tricks to try and book the sales as instant profits, rather than counting it as a sale when the item was actually sold months later.

But she’d like everyone to ignore that little bit too.