I believe there is a real bad
atmosphere at the company now and that people are stunned
wondering what the hell happened. There are rumors
spreading that this was all a PR stunt by Mike
Also, would NOT recommend the stock to anyone right now
due to the lawsuits...
It appears that the
employees are pretty bummed cause their stock options may
be worthless when they can finally cash them in in a
couple of years!
Like every comparison, there are real differences
between LGTO and MSTR. MSTR has much more interesting
S/W. OTOH its clear that the MSTR takes more
handholding and support while at the same time providing more
value added. They also use PR extremely effectively.
The "black bra" story is a key example. This is the
sort of thing that happens day in day out with lots of
different db's and products. In a period of momentum
trading and, shall we say, "elastic" valuations this can
be an asset.
Its also clear that the analysts
were not left hanging by MSTR. Looking at LGTO its
clear the analysts felt they were twisting in the wind.
Just days before the Qtr, they were telling
institutions and analysts they were going to make the numbers.
OTOH, the sheer magnitude of the restatement of MSTR is
a flag. And the indications of mutual back
scratching sales creates some question as to the quality of
revenue. Of course this is of concern where the revenue
multiple is so high that the opportunity exists such as is
typical in high tech, high momentum stocks.
cool stuff, the engines and front ends have sure
gotten damned good. Let me at the metal though ;)
saying in my post. These two cases have pretty
much nothing in common except for that SOP-97 and
SAB101 played some role in both. By no means does it
mean that MSTR's recovery would be weak like
I expect to see 180-200 fairly soon. Sooner if we
get positive news, later if we get some more negative
news. Only negative news I see on the horizon is that
the company is going to come up with the revised
(downward) guidance for revenues and earnings, and generally
that is never good. Obviously this is different since
the stock already has taken such a steep fall.
See the comparison charts and you will see the difference for
MSTR has already started to bounce back in earnest.
There are a couple of things that one needs to
realize before one tries to speculate that MSTR will
follow the same path LGTO did after the
Please read this artcle
(http://www.fool.com/news/2000/lgto000120.htm?ref=yhoolnk) to understand that LGTO had serious doubts and
questions raised about their ability to be a viable player
in the enterprise market, it was not just a case of
restatement. In the case if MSTR, they are obviously kicking
ass in the market, and are THE leader in their space
(although I am sure the shorts would call them a "SQL
Generating Consulting Company").
The other thing that
might make a substantial difference is that LGTO was
hit left right and center with analyst downgrades,
presumably due to the point I made above. Contrast this to
the rock solid analyst support MSTR has received
after the debacle. Even the most long-established bear
on MSTR, Merrill has downgraded to Accummulate,
which is hardly bad since that is the second best
rating from MLCO (they don't have any "strong"
As far as the lawsuits are concerned, one BIG
positive for MSTR after this debacle is that there is
hardly any insider trading activity for at least a
couple of months back. Just one "small" sale by some
Trundle guy. Absolutely no insider selling trend from
where I stand.
All this having been said, I
think the recovery is just as overdone and premature as
was the sell-off, so there is no fair way to analyze
where the stock should be at this time. To think that
the stock is almost exactly where it was at the
beginning of March seems to undermine the significance of
these recent events. On the other hand, if one sees
that it is trading at 40% of its price as of March
10th, then there still seems to be PLENTY of room for a
Interesting, isn't it :-)
Thanks for the LGTO ref. Indeed, same basic
problem. Here are the comps.
1. LGTO revenue errors
were far less a percentage of the company than MSTR,
10% vs 25%
2. LGTO profits were impacted much
less than MSTR. Lower profits rather than large
3. LGTO also had a recent registration statement
withdrawn as a result.
4. LGTO didn't claim SOP97-2
compliance, rather they stated their revenue recognition
Their stock took somewhat less of a hit but has
recovered somewhat less also.
I have been burned once by LGTO for a same
problem. I feel for MSTR shareholder.
should look at the LGTO chart for the example how the
stock move in the next few weeks.
need to be hanged...
Disclaimer: not long or
short, just lurking this board to understand the real
nature of the reinstatement. I am holding other software
stock...and do not want to get caught again ( after