... finally, the fourth part draws a conclusion about this discussion. Part 1: MicroStrategy In March 2000, MicroStrategy (MSTR), a worldwide software company, announced that it was revising its financial results. Sales would be lowered by roughly 25 percent, from $205 million to about $150 million; and profits would be adjusted from 15 cent a share gain to a 43 cent a share loss. The reaction was swift. MSTR's stock plunged $63. But just two weeks before, its common stock touched $333, up nearly 46-fold in a year. Huge sums of money were lost by investors who based their investment decisions on misleading reported numbers.2 While many in the business press blamed the problems on aggressive accounting practice, we should question where those investors who bought MSTR shares at $333 went wrong. In 12 months, the stock had multiplied nearly 46 times. Was it conceivable that this business could be worth 46 times ...

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