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Technology Stocks : Silicon Graphics, Inc. (SGI) -- Ignore unavailable to you. Want to Upgrade?

To: djane who wrote (5843)	3/11/1999 9:34:00 PM
From: Kirk Vanden	Read Replies (3) \| Respond to of 14451

I was looking at the last paragraph of the eetimes article that was posted in post #5843 >> As part of that strategy, the company has >> taken a $75 million equity investment in Wam!net Inc. >> (Minneapolis),which has developed an online archiving and >> communications network that allows subscribers to share >> information with customers and suppliers. Wam!net will >> in turn buy SGI systems over the next four years to build its >> network. SGI has already sold 2,000 servers to Wam!net, and >> has 1,000 more on order, said Keith Watson, SGI's >> executive vice president in charge of worldwide sales and >> marketing. Maybe someone can explain this to me. At face value it appears SGI gave Wam!net $75 Million, which Wam!net then gave right back to SGI to pay for SGI servers. Will SGI book the 3,000 servers as revenue and also get to keep the $75 million on the books as an asset ? I don't know enough about generally accepted accounting practices, but I do know that you can't give away servers for free. I have no reason to believe SGI is intentionally trying to be sneaky, but I'm suspicious whenever I see stuff like this. Kirk