To all: here is the major, major surprise that I believed was so unlikely. Obviously both the $96 M and $54 M contain buried "overstatements" from previous quarters. I suppose that management decided that this action was the smartest way to bring the A/R figure to a credible level, and the best timing to prepare for a better Q4.
Clearly Q2 revenues, were overstated, or the $96 M would not, or logically, could not, have occurred. By writing down $32 M in revenue at the same time as recognizing lower revenue than Q2, Corel's balance sheet becomes "cleaned-up" all at once.
The A/R figure is the only component of the balance sheet that has been questionable or the past several quarters. I had hoped that "blockbuster" WP8 sales, plus all the new releases would allow Corel to absorb the previous overstatements, and in time, allow the A/R to come down and cash increase.
I'm disappointed in my revenue projection, but thought it logical given the reported Q2 sales. I'm not disappointed that management has taken another step to clean-up the balance sheet and position itself for a much more accurate, and, more than likley, strong Q4.
I think the share price is already heavily discounted and doubt that much downward pressure will result. After the "initial shock," the stock should continue to rise.
I guess I'm the one who was "up, up, and far away." But let's not forget that Corel is still producing top quality products that are just reaching the various markets. So for the long term its . . .
Up, Up, & Away!
Scott
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