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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: FRED TABBAL who wrote (7203)	11/3/1997 10:42:00 PM
From: Dom Sartorio	Read Replies (1) \| Respond to of 14577

The issue isn't overall revenue, it's trust in management. The fact that total revenue at the end of the fiscal year won't be much different is almost irrelevant. What's relevant is that either the operational controls within S3 are so poor so as to result in numbers being off by this much, or management was outright lying regarding previous earnings estimates. Think about it... would you invest your money in a company where either one of these (or maybe both?) was true? At the very least, either way results in us investors (individual and institutional) not knowing what to believe regarding the future prospects of this company, especially mgmt's forward-looking statements and future biz plans. Stock investing is risky enough without having to worry about the competence or honesty of management. Why would somebody invest in a stock with this additional element of risk? i.e. Right now I don't know what to believe, so I'll put my money where this isn't an issue. Some food for thought.. 1. If I were an institutional investor, I'd be thinking "how the heck do I get out of this stock, and how do I get my biggest clients out, and minimize my loss?" Might some institutions try to "talk up" the stock as they try to get out? If this happens I'll sell on any uptick in stock price. 2. Regarding distributors selling in Q4.. the press release seems to assume that distributors will sell their inventory in Q4, so S3 can book this revenue in Q4. I sincerely question this. This is very similar to what happened to IFMX when they had to restate earnings.. distributors ended up never resell the goods.. could same thing happen to S3? 3. I'm sure Gary is on the hot seat now. This kind of thing should never happen, and I'm sure the board realizes this. Looking for exit point, and wondering whether to take capital loss deduction this year or next, DOM