If I had to take a guess to piece the puzzle together, I'd guess, S3 has 2-4 months visiblity on their business not 1-2 weeks as they often claim. GJ being very green and seeing more money then he has seen before and feeling pricing pressure going into the slow 2Q, decided to sell some stock in Feb. 97. I think as soon as he did it he may have had second thoughts about the implcations. So as not to compound the issue, the last thing they needed were to start missing Q's, how would look to the shareholders. So as is common, I think they may have done some "borrowing" on 3Q's sales to prop up the seasonally weak 2 Q and figured the would "borrow" from the strongest Q of the year the 4Q to pay back the 3Q. So no big thing, this type of thing goes on all the time, it you have back end loaded Q's and you hit your # and the next Q looks weak, you shift some to the next Q, and vise visa.
But I think 2 things did not go S3s way, one was their new CFO, Walt, I think he is to conservative for that practice and as a condition of him accepting the job, may have told S3 that had 60 days to strighten out the accounting or he would restate. Second, I think S3 was gambling on a strong 4Q to strighten out the accounting, when it didn't happen, I think Walt step in and the jig was up. Although I'm not happy about it as of yet we don't know what the financials are and it may not really be as big a deal as some on this thread are making it out to be. |
