Re: [CANSLIM] PSFT: More accounting shenanigans?

From: Marc Deiter <dites@yahoo.com>
Subject: Re: [CANSLIM] PSFT: More accounting shenanigans?
Date: Tue, 22 Jan 2002 09:35:39 -0800 (PST)

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If you're interested in reading more, one of the last two issues of
Forbes had an article about PeopleSoft and this specific issue with
accounting practices and Momentum.  I only scanned the article, but
it sounds like something to avoid.  On the other hand, I work in the
consulting field and PeopleSoft's products, especially there CRM
(Customer Relationship Management) software seem to be growing
rapidly in popularity.

Marc

- --- Tom Worley <stkguru@netside.net> wrote:
> so, how can small investors detect, much less avoid, these kinds of
> slick tricks?
> 
> Tom Worley
> stkguru@netside.net
> AIM: TexWorley
>   ----- Original Message ----- 
>   From: Katherine Malm 
>   To: canslim@lists.xmission.com 
>   Sent: Tuesday, January 22, 2002 11:45 AM
>   Subject: [CANSLIM] PSFT: More accounting shenanigans?
> 
> 
>   Once more into the fire. Think this will become the "year of the
> accounting case study."
> 
>   --Katherine
> 
>    This from Briefing.com
> 
>         Archives In Play® all dates   
>         Date (ET) Archive Article 
>         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. 
>         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. 
>         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.'
> 
>        
> 
> 

> ATTACHMENT part 2 image/gif name=show_headline.gif



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