LEGATO SYSTEMS LGTO Message Board

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Technology Stocks : LEGATO SYSTEMS LGTO

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To: aliveinsf who wrote (624)	1/20/2000 4:51:00 PM
From: A. Wayne	Read Replies (2) of 1138

aliveinsf, My background is also financial management plus auditing and budgeting. The scenario I'm imagining is that there were order push outs to the next quarter or further. That causes reductions of reported revenue and profit. These may be perfectly honest revisions. The questions that arise are when did the company (Management/Sales/Accounting/Auditors) know revenue and profit would need to be reported lower than the released estimates? Was it two days ago when the customer pushed out the orders or two months ago? If it was two months ago and the internal auditors thought they could hide it or management thought they could get the orders reinstated at the last minute, then you have some serious business ethics problems (IMHO). Not that businesses don't do this all the time, because, they do. If this is a one time mistake and the company is still good for 50% growth in revenue and profit, then over a quarter or two $30 may look like a great price to have gotten in at. Don't expect management to tell you what really happened because they won't, nor will anyone down the ladder from Management. Wayne

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