Credit ratings agency Moody's recently downgraded Bearing Point (NYSE: BE)'s ratings from B1 to B2, and put them on watch for further potential downgrade. The agency took note of
the firm's year-to-date cash outflows, due to finance and accounting systems costs and of course the inordinate delays in filing its 10-K and last but not least the huge employee turnover seen in Q2 -2006. These ratings are considered speculative...
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5 comments:
I think it would be a good strategy for BearingPoint to go private. I have 29 years experience with Ernst & Young and Accenture. I have a very close relation who until recently was with BearingPoint. Your suggestion makes good business sense.
I agree - it makes no sense for a company like BearingPoint, with no real product to sell other than employee expertise, to go public in the first place. I worked for this company until recently and the amount of money and time wasted on "catching up" with these financials was ridiculous. This is not the company's only problem, however...generally incompetent management (of which the financial debacle is only a symptom) and low company morale are also huge.
There is not only little cooperation between the various industry sectors, but even between projects doing the same type of work within a sector. In addition, there is a total and complete disconnect between HQ and field personnel. There is literally NO cohesion or common direction.
Public or private, they need to ensure they can respond better to changes in market realities than "design a new logo" or come up with yet another "great tool or initiative" (invariably named OneSomething) that is designed by people that don't even do billable work.
At this point I consider the shares I bought with this industry disaster story a total loss... Rand Blazer should be prosecuted along with most of his management team and every time I check the stock price I get angrier...but am never really surprised.
So, while I agree they should no longer be a public company, I also know that isn't really going to fix the root cause of their problems.
Bearing Point needs to go private the overhead is too much in this era of thin pricing of USD 100 per hour.
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