The trick means real net income is larger than what’s on the books/10-K filings. Misclassified investments are not wasted money, simply hiding how much money is available for other expenses.
It’s like the old trick of paying an offshore subsidiary in a tax heaven licensing fees to use your own IP with the added advantage of being able to directly profit from the use of these investments. Nobody looking at the books would think such things are actual expenses, but companies must pretend they are.
