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Technology Stocks : LEGATO SYSTEMS LGTO -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (714)	1/26/2000 12:59:00 AM
From: gmccon	Read Replies (2) \| Respond to of 1138

See you at 17. From there we can wait for 11 and make a relatively safe investment. Even so, it will take a year to settle down to 11. Put your calculators away and use some common sense. The Street's punishment has just begun for this one. Once the institutions have finished bailing, individuals will finish it off. Voila, $11. Good luck, (I haven't had a position in this company for over a year.) Greg

To: Chuzzlewit who wrote (714)	1/26/2000 11:11:00 AM
From: Robert Hughes	Read Replies (1) \| Respond to of 1138

Excellent description of prepaid services delivered over time and recognized over the course of contracts. In this case, the situation seems to be a bit different and even more damaging. Roughly $20mm in sales were made to a firm which was too new/poor to pay for it in advance or under conventional terms and booked when signed. However, payment was to be ONLY from revenues for services provided to clients using the purchased software. This doesn't just shift revenue recognition, it calls collection at all into question. In effect, the product was consigned, not sold.

To: Chuzzlewit who wrote (714)	1/26/2000 12:01:00 PM
From: Pink Minion	Read Replies (2) \| Respond to of 1138

Here's a hypothetical that illustrates the explanation to the mystery. I understand recognition. This should mean a year from now the growth rate should go back to 100% (or whatever it was) since you now have the past 4 quarters on the books. Am I wrong? Just an ex-geek that took one class in accounting. MH