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

To: Jan A. Van Hummel who wrote (7601)	11/8/1997 12:55:00 PM
From: Ken Muller	Read Replies (2) \| Respond to of 14577

Jan: You can take over my position as the bearer of good scenerios for this company. I found it too heavy a load. But ask yourself a few questions, and then decide how you wish to proceed as an investor. 1. Does it make sense after performing the same accounting practices year after year that S3's accounting department would suddenly forget how to add the revenue and inventory numbers up correctly? 2. If you think that is possible, then S3 would have had to have incorrect inventory numbers to share with their customers and their production control people every week for the last 2 quarters. Otherwise, there would have to be 2 sets of inventory numbers. Possible? 3. Should you reach the conclusion (as I have) that S3 management directed this accounting change, how can you (or anyone) believe future statements by the company? 4. Your analysis of the company's BV and future potential is right on. However, the lawyers (and hopefully the SEC) are necessary for the investors to find out how this happened and to replace those responsible with qualified personnel. Unfortunate, but necessary. Otherwise this company cannot move forward. There is a simple way for management to avoid these expenses in the future: Tell the truth. 5. Some in the investment community knew was happening ahead of time, Jan. I cannot prove it but they knew. Ken