zzzz....

Barry Minkow started a small garage shop carpet cleaning service at the young age of 15 and in less than 6 years, built it into a $200 million company. By the time he turned 18, he was the talk of Wall Street and a millionaire. He named his company ZZZZ. In 1987 his company went to sleep permanently when his officials filed for bankruptcy. He was alleged to have misrepresented more than $23 million and having used the company's money to sell drugs.

That was a disaster discovered a little too late.

In 1993, Gerald D. Murphy, the Chairman of Erly Industries of Los Angeles was questioned about non-disclosure of sensitive information to the shareholders. The company had been undergoing an investigation for 3 years regarding its rice sales to Iraq, which were financed by the Atlanta branch of Banca Nazionale del Lavoro, the state-controlled Italian bank.

This also delayed a merger the company was supposed to go through. The Chairman said that non-disclosure was damage control and was in the shareholders' best interest. Even after a lot of heat, the information was not made available to the shareholders which meant that most of them didn't even know what hit them when the stock fell.

This I guess shows how investor friendly companies really are if the same is not in their interest. Thankfully, a majority of the companies don't come into existence to perform an "Enron" or a "ZZZZ".

How informed are you about the company you have invested in?