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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: MythMan who wrote (706)1/22/1998 11:36:00 AM
From: Joseph G.  Read Replies (4) of 86076
 
<<The Complaint alleges that throughout the Class Period, Adaptec exceeded analysts' earnings estimates and was able to report consistent quarter to quarter earnings growth by
improperly recognizing revenue on shipments of products that Adaptec had agreed with its distributors could be returned if unsold. The Complaint further alleges that Adaptec
failed to take required write-offs of accounts receivable necessary for a fair presentation of its operating results. As a result of defendants' false statements, Adaptec stock traded
as high as $54.25 per share during the Class Period.

On January 8, 1998 Adaptec revealed that it would suffer a huge revenue shortfall for its third quarter ended December 31, 1997. On this announcement, Adaptec common stock
fell by almost $16 per share to as low as $20 per share. The Complaint alleges that the third quarter shortfall was the direct result of Adaptec's earlier shipments that were
improperly recognized as revenue, which caused increased returns from its distributors and cancellations and deferrals of future orders.

During the Class Period, Adaptec insiders, who are named as defendants in the Complaint, unloaded in excess of 750,000 shares of their Adaptec common stock at prices as
high as $50.44 per share, for unlawful proceeds of approximately $31 million. >>
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