QUANTUM Message Board - Msg: 3318659

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Technology Stocks : QUANTUM

QNTM 9.210

-6.4%

Dec 12 3:56 PM EST

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To: Carmine Cammarosano who wrote (7221)	2/2/1998 4:03:00 AM
From: Richard Tsang	of 9124

Checking into their latest filing it appears to me that the change in the number of shares outstanding for reporting purposes was due to the new rule from FASB (#128), requiring that the per share data be reported using "basic" instead of the previously used "primary" and "fully diluted". Since the share price dropped below conversion prices of the options outstanding, those numbers were not included for reporting as they became "anti-dilutive" for this purpose. These are the "averaged" numbers of shares I gathered from various reports: Outstanding (primary) previous Q = 146 million Outstanding (fully diluted) previous Q = 173 million Outstanding (basic) this Q = 136 milion Please correct me if I am wrong. Your question got me looking deeper into their QNTM financials. I am surprised by the cashflow generated in the last quarter. I think the management is prudent in making huge reserves to write down the inventories which surgef by more than 150 million. The management wanrned that the reserve may not be adequate if situation does not improve (inventory in-house and in the channel). However, if that does improve (as evidence is pointing to this direction lately), their reserve (100 million or so) may prove excessive and may have a chance to go back to bottom line again, IMO. I am currently not long on QNTM but will be before too long. RT

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