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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 (8007)	11/19/1997 5:30:00 PM
From: Michael	Respond to of 14577

I really don'tknow if the board had any knowledge of this. Although it is certainly possible, I think it unlikely. I don't think outside directors would go along with that kind of thing. I think knowledge of it is probably limited to GJ and the ex-CFO.

To: Jan A. Van Hummel who wrote (8007)	11/19/1997 6:35:00 PM
From: Parker Benchley	Respond to of 14577

Incompetence yes, "low ethical standards" is quite a claim and until there is news to suggest so, I would like to hold it to incompetence. Jan, I agree. I liken it to Laurel and Hardy. Stan (GJ) kept getting Ollie (Dado) into messes through his sheer incompetence. There was really no collusion and low ethical standards involved. Just brainless acts. Nevertheless, it was always a mess. The funny part is that Ollie never got it and kept trusting Stan to be responsible. I hope S3 management "gets it" and won't allow another fine mess for GJ to get us into. Onward, George

To: Jan A. Van Hummel who wrote (8007)	11/19/1997 6:43:00 PM
From: Jan A. Van Hummel	Read Replies (2) \| Respond to of 14577

Restatement results Today's news release shows a restatement in the middle of the initially advised range, namely revenues down $58 million and earnings $0.23/share. Since the market likely discounted the upper end of the range ($70 million and $0.29/share, the news should not be perceived as negative and may even elicit a positive reaction depending on what the overall and hi-tech markets are doing. There is one disclaimer in that the Audit Committee is continuing its review of revenue recognition and that this review has not been completed. However, the company believes that it has quantified the revenue misstatements. However, like to look a little closer at the figures to see if there is anymore relevant information in them. Once this all has been digested I think there is work to be done. We will soon need to see the company take the appropriate steps to eradicate shortcomings in the check and balances of the company and announcements of forthcoming proposed changes in the composition of the Board to allow for an outsider majority and the proposal of widely recognizable quality directors that can have a serious impetus on product development and releavnt marketing strategy that will elevate the value of S3 to the position it should hold based on its current market share. Like George says: Onward JMHO Jan

To: Jan A. Van Hummel who wrote (8007)	11/20/1997 8:22:00 PM
From: Ken Muller	Read Replies (2) \| Respond to of 14577

Jan: <<Incompetence yes, "low ethical standards" is quite a claim and until there is news to suggest so, I would like to hold it to incompetence.>> I really am trying to wear the rose colored glasses on this one Jan, but something keeps fogging them up. Couple of things just continue to bother me: 1. S3 says on 11/3 that the accounting errors occurred primarily during 2nd and 3rd quarters and would be accounted for primarily in 4th quarter. Now we learn the bulk of the accounting errors occurred during 4th quarter 1996. The differences in the statements suggests total ignorance or an attempt to divert attention from the proper time. (If you don't know when the errors happened, its ok to say that.) 2. George Hervey (Previous CFO) resigns on 3/4/97. 3. Most all the recorded insider stock sales of the board occurred during 4th qtr 1996 and 1st qtr 1997. As you know, I have been a big promoter of this stock in the past. I still believe its asset valuation alone justifies a higher price. People tell me that this is just an accounting error with no significance. I can tell you that anyone who failed to get every little sale correctly recorded in the semi business would get fired in a minute. This accounting error requires mass cooperation from many parts of the organization; everyone knew. The problem S3 has right now is with the accounting firm who audited the year end results. They wil become part of the lawsuits. Unless they were completely derelict in their duties (always possible) they were given the wrong numbers. Wrong revenue, wrong inventory, wrong accounts receivable. I am trying to see the brighter side. Really. They knew. Ken