Net Perceptions, Inc. (NETP) Message Board

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Technology Stocks : Net Perceptions, Inc. (NETP)

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To: Carl R. who wrote (2608)	7/30/2000 10:30:11 AM
From: rupert1	Read Replies (2) of 2908

Carl: Good point about what is reported to the SEC and the discretion given to analysts to disregard this or that. I don't think anyone has disputed that the loss on the lease is an operational expense. What was in dispute was whether it should have been taken in part or whole in 2Q or 3Q. I say 3Q precisely because it is an operational expenses relating to the month of August and after. I can see no necessary reason whatsoever for it to be taken in 2Q except the reason Bernie suggested on another board that there is a rule that says the loss should be brought forward because the new lease was signed in 2Q so the loss was created then. (If I have understood his point). However, I agree with you that the reason for taking it in 2Q could be strategic, rather than necessary, to clear the decks for 3Q. I am not so convinced that NETP had such a strategy. It seems more to have had to do with their very conservative accounting given some confusion. As bernie says, analysts have grounds for disregarding the 3 cents as an operational expense for 3Q, whether or not some or all of them have. I also agree with him, that in calculating progress in operations in 3Q we should start with the assumption that 2Q was 0.12 cents. Any revenue from sub-letting will contribute to revenues in 3Q or subsequent quarters. I liked your comparative analysis of the cost and effect of the KD1 acquisition then and now. All things being equal it might suggest that a company of KD1's size could be bought now for $25 million in cash, although I think NETP would still try to use at least some shares as part of a mix. When someone suggested that NETP had overpaid in paying 1.24 millions shares, I responded some time ago that NETP shares involved substantial risk. I think there was an embargo on the KD1 people selling for a time. I was never sure whether they were included in the SPO embargo - but I think not. For all we know that 1.24 million shares could have contributed to the selling. KD1 was a pre-IPO. I think there are more pre-IPO companies now wary of coming to market. Perhaps the ex-Intel man NETP hired to look for acqusitions - Mussleman (?) - has been looking among the pre-IPO's.

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