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Non-Tech : Secret Squirrels hit! -- Ignore unavailable to you. Want to Upgrade?

To: Trumptown who wrote (5179)	3/31/1999 7:42:00 AM
From: kendall harmon	Read Replies (1) \| Respond to of 12872

ROSI-I see some of you all are playing it. Here is a debate from the Yahoo Boards: From sabnico4191 on the Yahoo thread: "I would wait to hold a big position if I were you. Management has mislead stockholders already. Case in point, In February, they said that earnings are going to be ok. Yet, there was a lot of insider trading. No wonder this stock was trading funny lately. It would go down to the 10's and as soon as it jumps up to 12-13, someone would sell fast. Be careful, this stock might go up to 7 plus and then drop fast again. Your comments.. " My response: "You have put your finger on one of the key facets of the ROSI scenario, that of management. I explicitly said I was troubled by it, and I posted the Bloomberg story precisely for this reason. Here is the important Bloomberg excerpt: "The announcement stunned BancBoston Robertson Stephens analyst Andrew Jeffrey, who cut his rating to ''market perform' from ''buy.' Jeffrey said company officials told analysts in February only that flower sales would be hurt by the weekend Valentine's Day, while earnings would be protected from any revenue declines. U.S.A. Floral said in a Feb. 23 press release that revenue would be down 10 percent, but that it agreed with analysts' earnings estimates. ''This means either you gave guidance you shouldn't have, or you don't have accurate insight into your business,' he said. ''It is unfathomable they did not know. Any shred of credibility management had is gone.' Chief Financial Officer W. Michael Kipphut said the company received new information after speaking with analysts, and determined this past weekend the extent that earnings would be hit. ''We notified the market as soon as we were aware of any change in our earnings,' Kipphut said." Clearly the company blew it big time with the Feb 23 press release. But remember earnings are due out on or about May 3 and ROSI came out this Monday afternoon, over a month before earnings, to update people based on new information. How do we interpret this? One option is to say they deliberately misled people. Certainly this is possible, but I would caution people on this list about attributing motives to others without having a very full picture of the facts. The other is to say they warned a little over a month before earnings are out when it became clear to them they were wrong. This second possibility means, as the BBRS analyst said, that their knowledge base of their own situation was way off. Remember that this is a company in only their second year of operations. Why would they want to mislead people deliberately?"