CNBC's Brian Sullivan is a blithering idiot

For someone who has spent years covering stocks and financial markets, this guy is completely clueless about some really basic stock fundamentals.  He doesn’t know the difference between market price and a balance sheet.

Take a look beginning about 1:15 of this video.

Sullivan: “Three-fourths of the stock price is effectively cash or short-term investments… you’re paying for about 25% of the business is [sic] the stock price.  That’s why we look at cash,” he knowingly lectures CNBC viewers.

He’s referring to this statistic compiled by CNBC gofers:

Yes, cash is 75.1% of total assets for Priceline.  That just means, like a lot of internet companies, they don’t have a whole lot of physical assets like factories, retail stores, and inventory.  Duh.  It has absolutely nothing whatsoever to do with the stock price.  The stock price, in fact, is around $690, giving Priceline a market cap of about $35 billion.  That’s seven times the $5 billion in cash and equivalents on the balance sheet.  Here’s some remedial math for CNBC:

“That’s why we look at cash” indeed.

It can’t be chalked up to a simple mistake or misreading of the graphic.  Anyone who thinks a high-flying internet stock like Priceline could be trading anywhere close to cash on the balance sheet has absolutely no clue what is going on in the market.

I can’t believe they ran a whole segment on this and nobody told Sullivan he had no idea what he was talking about.

Anybody who uses CNBC for financial information and insight is duly warned.