Q: What is GAAP?
A: GAAP = Generally Accepted Accounting Principles
Q: What is Non-GAAP?
A: Non-GAAP is a confusing euphamism for "unacceptable/illegal accounting principles."
Q: Why is Non-GAAP reported?
A: Normally, when a corp. has lost lots of money (mostly due to the cost of paying employees through the company's own common stock) - then the corp. needs to "understate" its true cost situation so people think the corp. is "better" than it really is.
Q: Is the diluted-stock action illegal?
A: No. Stock is a form of compensation. When you pay your people relatively little in terms of US$, you need to compensate them with stock privileges.
Q: Does that make a difference in earnings for the corporation?
A: YES - Non-GAAP means you are not reporting your true expenses; therefore, your perceived earnings are much higher than they really are.
Q: Do people get confused and buy stock when they shouldn't in that case?
A: Definitely. TV networks even work with the corps to fool investors. Yes, it should be illegal, but it's not(!) ha ha...! Be advised!!
