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Technology Stocks : Open Text
OTEX 38.07-0.1%10:05 AM EDT
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To: Skywatcher who wrote (1151)10/30/1999 3:00:00 AM
From: PeakClimber  Read Replies (1) of 1195
 
Dawgfool, Chris,

Take another look at the report. I had a ton of OTEX and sold earlier this summer when the stock broke down technically for no reason and I started wondering if somebody knew something - similar to Documentum at the beginning of the year before they suddently lowered expectations for the year.

Anyway, just to be clear - OTEX's earnings were pathetic! With operating income of just $26,000, they matched estimates purely because of one-time non-operating income.

One more thing that raises a flag - DSOs have gone way up to 129 days. Find me even 1 strong enterprise software company with these kinds of receivables.

With DSOs gone up this much, even if you don't know much about accounting, you just HAVE to wonder whether this could account for the 47% top-line growth. Who knows, perhaps that was some anemic things before a bunch of last-minute bookings which haven't been collected!

Any time odd coincidences occur at a company - CFO leaving without a warning accompanied by UK revenue recognition issues accompanied by a earnings warning accompanied with a partner selling discounted software(and OTEX not being able to stop them for 2 weeks) accompanied by a 30% rise in DSOs - you've got to stop and wonder if you should wait to a quarter or two to see whether something's wrong, right?

Even a OTEX cheerleader has got to accept that this is only prudent :-)
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