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To: 2MAR$ who wrote (14623)	9/6/2001 11:44:37 PM
From: Smart_Money	Respond to of 208838

businessweek.com 1999 When Market Analysts Attack Did this one change his tune on eMachines Inc. just because he didn't get a cut of the IPO? Ever wonder what makes a Wall Street analyst go negative on a stock in today's high-flying high-tech sector? Try cutting his firm out of an initial public offering. Fellow analysts are wondering if that's what happened with U.S. Bancorp Piper Jaffray's Ashok Kumar, judging by the way Kumar went from high praise to vitriolic criticism of PC maker eMachines Inc. almost overnight. Early last spring, Kumar, who is a frequent chat guest on Business Week Online, was publicly praising eMachines, a maker of sub-$600 PCs which had vaulted from startup to No. 3 in U.S. sales in six months. In March, Kumar told Business Week: "eMachines has created a brand-new model. The [PC] big boys need to be careful." And privately, he was pleading with eMachines' CEO Stephen Dukker to underwrite the deal. He hosted an elaborate welcome for Dukker at Piper Jaffray's Minneapolis office, complete with face time with CEO Addison "Tad" L. Piper, says Dukker. When word got out that Dukker was close to deciding which underwriters to use -- he subsequently chose CS First Boston, BancAmerica Robertson Stephens, and Hambrecht & Quist -- Kumar called him repeatedly, Dukker says. "It got to the point in April and May that I didn't want to answer my cell phone," says Dukker. DRAMATIC CHANGE. On May 10, Kumar sent an e-mail -- or plea-mail, as Dukker calls it -- asking for just 10% of the deal. "That itself should be indicative of my sincere interest in your story," he wrote in the e-mail, provided to Business Week by Dukker. "I have known you and supported your story longer than all the analysts on the [deal] put together." When Dukker still refused, he says Kumar proposed that Piper do the deal for free, just for the name recognition. Kumar denies this, saying: "To my knowledge, we've never ever done any deals for nothing. Why would we?" After Dukker's rebuffs, Kumar's public pronouncements about eMachines changed dramatically. On June 1, just three weeks after the analyst had sent his e-mail, he wrote a scathing report saying that "we do not believe that [eMachines'] retail-focused business model is sustainable.... This business model has all the makings of sucker.com!" When asked by Business Week a few days later whether eMachines would be able to pull off its IPO, Kumar said: "I'm sure they can push it down some [investors'] throat at the right price.... The suckers bring the money, while Wall Street lights the match." On Sept. 20, he followed up with a report suggesting that eMachines' corporate structure -- the company is co-owned by Korea-based Trigem USA and Korea Data Systems -- hides necessary financial data, such as inventory figures, from would-be shareholders. "With the Korean parent companies assuming all the trade and credit risk, eMachines is pushing the boundaries of FASB-approved accounting," Kumar wrote.