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Strategies & Market Trends : Group Therapy -- Ignore unavailable to you. Want to Upgrade?

To: Logain Ablar who wrote (1465)	6/28/2000 10:09:00 PM
From: Duane L. Olson	Respond to of 4564

Tim, Aha!! I understand completely now. If LTXX is forced to move out -- delay--- recognition of revenue from sales of it's Fusion products until the point of customer acceptance, rather than from the point of shipment.....then LTXX would have one potentially miserable quarter. If everyone understood the cause of the decline, and if LTXX were to provide "comparable" information under the prior accounting method, do you think the market would penalize them all that severely? I'm mildly concernced about this, but the LTXX earnings growth is actually increasing-- so much so that analysts have had to increase their estimates several times in the past 6 months. Surely many investors would see through the "acceptance" problem, wouldn't you think. Finally -- is there any chance, in your view, that the reason LTXX is selling under 40 vice the former high of 52 is that some potential negatives from the accounting "issue" are already built into the stock? On a comparable basis with similar companies, I would expect LTXX to sell at 40 times next years earnings, or around 60 plus. Instead it is under 40. At least your explanation of the "acceptance" issue gives me some rationale for seeing the LTXX price depressed. Thanks so very much for clarifying that important issue. I think I will stick with my LTXX investment, but now I have some way to assess the potential negatives and make informed decisions about continuing to hold if LTXX gets forced to take that hit to reported revenues... tso