LHSP? this article suggests its time to do some digging
examiner.com
IN THE LOOKOUT for Lernout: Still haven't heard from anybody at
Lernout & Hauspie, the Belgian voice-recognition software company, with responses to this column's questions. (Heck, even Boston Chicken took my calls when it was being pounded here for plucking its investors). The Lernout affair, and the hostility of its shareholders, is reminiscent of the reaction I used to receive regarding Network Associates. How dare this column question the quality of earnings of such a fine company, whose virus-detection software and technology are, without a doubt, tops? (So what if it was pretty much being given away for free with every PC? That's what some critics think will happen to voice-recognition software.)
What do Network Associates and Lernout have in common? Both are in the software business. And both have unusually high receivables, suggesting too much software is in the pipeline, which is just what Network Associates conceded this week when it reported earnings that were even worse than the company had warned they would be.
Also, both Network Associates and Lernout have grown, largely by acquiring companies. Once the acquisitions stopped for Network Associates, so did its revenue growth. Will the same thing happen at Lernout?
And both got slapped by the Securities and Exchange Commission (SEC) for being way too aggressive with their takeover-related expenses.
One difference between the two: Unlike Network Associates, Lernout has questionable related-party transactions, one of which, involving e-Docs.net, was recently detailed here.
Another difference: The stock of Network Associates has swooned 83 percent from its highs, and now trades at $11.06, for a market value of $1.5 billion. Lernout, meanwhile, is off 38 percent from its highs and still commands a market value of $1.6 billion.
P.S.: This column's new rule of thumb: The more hostile the reaction to items here, the better the story always becomes. |
