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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (257)	3/20/1998 1:12:00 PM
From: Melissa McAuliffe	Read Replies (2) \| Respond to of 4509

Paul, From what I know and can even remember at this point, I believe it had to do with revenue recognition policies/practices. Though no one has ever come out and stated what actually happened, it appears they were overly aggressive in this area. It was primarily associated with how they recognized revenue from resellers and was a result of channel stuffing. I think there was a lot more flexibility in this area then than there is now and there was the option of recognizing revenue on shipment to the reseller vs. when the reseller actually sells the product. So from what I could deduce there was a lot of product out there that wasn't actually in the hands of someone who was actually legally obligated to pay for it which thus resulted in some very significant write offs. Obviously they thought this was one of those problems that would fix itself over time. It just didn't. Melissa