The added difficulty over the (for instance) Enron scandal is that this time, we don't have a nice set of publicly available SEC documents to look through (obviously not talking about GOOG/FB/TWTR). But with so many firms growing huge on private capital, we don't have the same opportunities for investigation that were available with many of the previous scandals. Most of Enron's malfeasances were documented, everyone was just so exuberant they didn't bother to look that closely. Once people did (a key short seller and a few journalists), Enron collapsed in about six weeks.
Finding the scandal will be much harder this time, but I agree it's out there. Cash prize to the one who finds it.
Weren't there a lot of accounting irregularities at Groupon?
There was never a stock I wanted to short as bad as GPRN when it first floated, but my broker wouldn't let me, and it was too new for options. So frustrating.
It's not the failed IPOs like Groupon and Zynga you have to worry about. Those are actually good outcomes.
It's the ones that are "too big to fail" that you have to worry about. And it might not even be explicitly accounting this time.
I've had this strange suspicion for a while that a lot of the companies selling ads are doing some bogus stuff. I mean, we all know there's a lot of fraud happening in terms of ad serving/tracking and accountability, but I suspect that it's been institutionalized somewhere.
Or it could be any number of things. The amount of bullshit I've personally witnessed by startups to close a new round is staggering. The number of times I've seen people find creative solutions to adding an extra zero to "monthly active users" is just too damn high. Investors keep investing, established firms keep acquiring, and no one cares.
Finding the scandal will be much harder this time, but I agree it's out there. Cash prize to the one who finds it.