Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: [CANSLIM] PSFT: More accounting shenanigans?
Date: Tue, 22 Jan 2002 10:45:01 -0600
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Once more into the fire. Think this will become the "year of the =
accounting case study."
- --Katherine
This from Briefing.com
Archives In Play=AE all dates =20
Date (ET) Archive Article=20
Jan 22 2002
11:06 AM In Play PeopleSoft (PSFT) 33.45 -1.89 (-5.4%): -- Update =
- -- This is not the first time that concerns about accounting at the =
Momentum unit have been brought to light. On Jan 2, Briefing.com =
reported a Lehman defense of the stk following a 12/31 Bloomberg article =
indicating that PSFT might repurchase its Momentum Business Applications =
unit to avoid paying royalties. Lehman predicted that PSFT was likely to =
purchase Momentum for about $90 mln within the next few qtrs. Firm did =
not think there were accounting irregularities and viewed the issue as =
likely overblown.=20
Jan 22 2002
10:53 AM In Play PeopleSoft (PSFT) 34.37 -0.97 (-2.7%): =
- --Update-- According to the San Jose Mercury article, PeopleSoft hired =
that subsidiary, Momentum Business Applications, to write new software, =
and Momentum, in turn, hired PeopleSoft programmers at a markup. The =
arrangement transformed the high cost of creating new programs into a =
source of revenue for PeopleSoft.=20
Jan 22 2002
10:49 AM In Play PeopleSoft (PSFT) 34.32 -1.02 (-2.9%): Accounting =
concerns again putting pressure on PSFT shares. The San Jose Mercury =
News reports that an accounting maneuver by former PSFT head allowed =
company to avoid crushing development costs. Six months before stepping =
aside, PSFT co-founder David A. Duffield transferred $250 million to a =
newly created subsidiary with just one employee and an office down the =
road from PeopleSoft headquarters. Peter Knutson, an associate professor =
emeritus of accounting at the University of Pennsylvania's Wharton =
School, believes the arrangement misled investors: 'It is within the =
boundaries of generally accepted accounting principles, but it is really =
an intent to deceive.'
=20
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<DIV>Once more into the fire. Think this will become the "year of =
the=20
accounting case study."</DIV>
<DIV> </DIV>
<DIV>--Katherine</DIV>
<DIV> </DIV>
<DIV> This from Briefing.com</DIV>
<DIV> </DIV>
<DIV>
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<TD class=3Dcat vAlign=3Dtop width=3D669><B>Archives </B>In =
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<TD class=3DtdG noWrap width=3D"12%">Date (ET)</TD>
<TD class=3DtdG noWrap width=3D"10%">Archive</TD>
<TD class=3DtdG noWrap =
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<TD class=3Dtd4g vAlign=3Dtop noWrap width=3D"12%">Jan 22 =
2002<BR>11:06 AM</TD>
<TD class=3Dtd7g vAlign=3Dtop width=3D"10%" rowSpan=3D2><A =
class=3Dtd7g=20
href=3D"http://www.briefing.com/scripts/ArchCal.asp?ID=3DIN"><FONT =
style=3D"BACKGROUND-COLOR: #eaf4f1" color=3D#000000>In =
Play</FONT></A></TD>
<TD class=3Dr2 width=3D"78%" rowSpan=3D2>PeopleSoft (PSFT) 33.45 =
- -1.89 (-5.4%):=20
-- Update -- This is not the first time that concerns about =
accounting at=20
the Momentum unit have been brought to light. On Jan 2, =
Briefing.com=20
reported a Lehman defense of the stk following a 12/31 Bloomberg =
article=20
indicating that PSFT might repurchase its Momentum Business =
Applications=20
unit to avoid paying royalties. Lehman predicted=20
that PSFT was likely to purchase Momentum for about $90 =
mln=20
within the next few qtrs. Firm did not think there were=20
accounting irregularities and viewed the issue as likely=20
overblown.</TD></TR></TBODY></TABLE>
<TABLE cellSpacing=3D1 cellPadding=3D2 width=3D754 border=3D0>
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<TR>
<TD class=3Dtd4w vAlign=3Dtop noWrap width=3D"12%">Jan 22 =
2002<BR>10:53 AM</TD>
<TD class=3Dtd7w vAlign=3Dtop width=3D"10%"><A class=3Dtd7w=20
href=3D"http://www.briefing.com/scripts/ArchCal.asp?ID=3DIN"><FONT =
color=3D#000000>In Play</FONT></A></TD>
<TD width=3D"78%">PeopleSoft (PSFT) 34.37 -0.97 (-2.7%): =
--Update--=20
According to the San Jose Mercury article, PeopleSoft hired that=20
subsidiary, Momentum Business Applications, to write new software, =
and=20
Momentum, in turn, hired PeopleSoft programmers at a markup. The=20
arrangement transformed the high cost of creating new programs =
into a=20
source of revenue for PeopleSoft.</TD></TR></TBODY></TABLE>
<TABLE cellSpacing=3D1 cellPadding=3D2 width=3D754 border=3D0>
<TBODY>
<TR>
<TD class=3Dtd4g vAlign=3Dtop noWrap width=3D"12%">Jan 22 =
2002<BR>10:49 AM</TD>
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class=3Dtd7g=20
href=3D"http://www.briefing.com/scripts/ArchCal.asp?ID=3DIN"><FONT =
style=3D"BACKGROUND-COLOR: #eaf4f1" color=3D#000000>In =
Play</FONT></A></TD>
<TD class=3Dr2 width=3D"78%" rowSpan=3D2>
<DIV>PeopleSoft (PSFT) 34.32 -1.02 (-2.9%): Accounting concerns =
again=20
putting pressure on PSFT shares. The San Jose Mercury News reports =
that an=20
accounting maneuver by former PSFT head allowed company to avoid =
crushing=20
development costs. Six months before stepping aside, PSFT =
co-founder David=20
A. Duffield transferred $250 million to a newly created subsidiary =
with=20
just one employee and an office down the road from PeopleSoft=20
headquarters. Peter Knutson, an associate professor emeritus of =
accounting=20
at the University of Pennsylvania's Wharton School, believes the=20
arrangement misled investors: 'It is within the boundaries of =
generally=20
accepted accounting principles, but it is really an intent to=20
deceive.'</DIV>
<DIV> </DIV>
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