- Round-tripping
Round-tripping, also known as round-trip transactions or "Lazy Susans", is defined by "
The Wall Street Journal ", as a form ofbarter that involves a company selling "an unusedasset to another company while at the same time agreeing to buy back the same or similar assets at about the same price." Round trips are characteristic of theNew Economy companies. They played a crucial part in temporarily inflating themarket capitalization of energy traders such asEnron ,CMS Energy ,Reliant Energy , andDynegy .Other companies making unconventional round-tripping deals include
AOL withSun Microsystems andGlobal Crossing withQwest Communications . It is alleged that when some telecommunications companies swapped capacity, they booked the value of the incoming capacity as revenue and the value of the outgoing capacity as aninvestment . These transactions had the effect of inflating profits. The SEC ruled that booking revenues from swaps in telecommunications capacity was improper.Many such companies have used round-tripping to distort the market by establishing false revenue benchmarks, aiming to meet or beat the numbers put out by
Wall Street stock analysts. As a result of abusive round trips, barter between publicly held companies has become discredited among professional investors.External links
* [http://www.forbes.com/2002/05/16/0516topnews.html Forbes.com Round Tripping On Energy] By Dan Ackman, May 16, 2002.
* [http://www.slate.com/id/2069896/ Slate How Enron and Qwest ruined a smart New Economy business practice.] By Daniel Gross Aug. 21, 2002.
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