Corel - Investors with no Humor Message Board

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Technology Stocks : Corel - Investors with no Humor

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To: A. Reader who wrote (332)	1/12/1998 7:02:00 AM
From: A. Reader	Read Replies (1) of 1094

===Another=== TITLE: re: corel-Kurt P. AUTHOR : Wisam Raad DATE: Sunday, 11 January 1998, at 3:34 p.m. I find the situation with Corel and their financial statements very interesting. I myself purchased stock a few months ago before it was revealed that Michael Cowpland sold 20 mill. worth of stock. The 4th quarter results will be revealed to be an exercise in creative accounting. The reason I believe this is that the write-offs are for product that ran on the Windows 3.1 platform. The costs associated with producing this software must have been included previously in their financial statements(maybe even in the previous year). I am fairly certain that the write-off of the software is at full market value or close to it, thus inflating the amount (even though it is basically not worth much). What is also interesting is that the term sales-out means that the software that they are currently writing off must have been included as revenue before. Some of you on SI have questioned how Corel's cash position has increased from last quarter. Well, in my opinion, this loss is simply a paper/accounting loss not a "real" loss in the true sense of the word. The company would have made a small profit probably in the neighbourhood of 5 mill. (just a guess though) but for shareholder's purposes the statement reveals a loss because of the write-off (shareholder loss as opposed to company loss). This is perhaps a convenient way to decrease the value of the stock so that MC and others can purchase some stock at lower prices( sell at $8 buy in again at $2-$3). Well, I bought at $5.35 when I though it was the bottom, and I probably got off easy compared to others out there. I contacted Investor Relations at Corel in December and was told that no info. could be revealed as this was a 'quiet period' whatever that means. I will continue to hold my stock because I feel the price will go up again (4th quarter '97 might be better than expected (?), certainly the new 1st quarter will show improved sales). I am in Canada and have noticed a lot more advertising for Corel Suite 8 at least a few times a week since Nov/Dec. Corel does have a superior product to Microsoft and others. I will be careful to watch in the future for other possible massive write-offs due to Windows platform changes for computers. It took around 1 1/2 to 2 years for the Windows 3.1 writeoffs to happen so that may be a good benchmark for future writoffs when Windows 97 comes out. I found the clarification of 'sales out' at the Corel Web page corel.com. 'Sales in' must mean customer purchases. Hope this helps as I am fairly certain all of the above is correct. I may join SI in the future but at this time I am unable to. Regards, Wisam

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