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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 (3551)	11/17/1998 7:01:00 AM
From: Melissa McAuliffe	Read Replies (2) \| Respond to of 4509

From an accounting perspective, how will they account for this on an ongoing basis? I guess if they could account for it as two completely separate companies I could see the point of doing it but even then I'm not sure. If it's all R&D, isn't R&D capitalized anyway so it doesn't have to hit the bottom line. If that's the case then I'm not sure it does make sense. Guess I still don't know what to make of this. If a person wanted to invest in PSFT seems like it would make more sense to invest in Momentum, or is this incorrect? I think this is the second time someone mentioned LU. When LU was spun off, weren't they already a viable company with products and a revenue stream?

To: Chuzzlewit who wrote (3551)	11/17/1998 11:14:00 AM
From: Marq Spencer	Read Replies (3) \| Respond to of 4509

CTC, I think its just a way to increase apparent margins and profits. This way, you can write-off $300 million, or so, as a one-time extra-ordinary expense, then don't have to show it in going forward. This is the kind of thing done in restructurings, which enables companies to claim higher operating profits going forward. I'm kind of disgusted because what PSFT is implying is that R&D is not really part of their business, and therefore, expense. That is absurd for a hi-tech company and quite the opposite of the way a small, nimble company represents itself. The "developing products for other companies" statement is hogwash, given that PSFT has the complete right to all technologies developed by Momentum. How many other companies would want Momentum to create technology for them, given that setup. I'm long on PSFT, and, right now, regretting it. - Brian.