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Sapient Corp. Message Board

  • fsdfasdfasdwerwer fsdfasdfasdwerwer Nov 21, 2006 9:39 AM Flag

    review complete

    "The restatement is not expected to affect either the company's reported revenues or cash position."
    Jerry, Sue and General counsel (whoever that is) seem to be responsible...
    Stu was exonerated and so was the board...

    But it is still trying to find out when they will release earnings... no guidance on that yet.

    wonder how market will react...

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    • So far, so good.

      • 1 Reply to bardonow
      • i think the problem here is that the press release really doesn't offer much of an update that wasn't already known.

        take aways:

        1) yep, confirmed that there was backdating of options - characterized as irregularities.
        2) yep, confirmed that because of the irregularities, they were not treated as non-compensation expenses and therefore, it will be necessary to restate previous quarter's earnings.
        3) yes, profit for quarters that people really don't care about, will be restated to lower profit but offset by potential tax benefits.
        4) no, they didn't give ANY indication to the $$$ amount necessary to be restated. they hinted at the fact that they analyzed the granting of over 60MM shares over the years. how much of those is anyone's guess. however, i suspect that this was "common practice" at sape and other places/companies and therefore this will be material in nature. also taking into account, these were the days where stocks would go up 20-40% per month. given the amount that SAPE used to move in just weeks, i suspect that this is a fairly material number in aggregate. if i remember correctly, SAPE was making well over 500MM a year. and split adjusted, had a trading range of less than a dollar all the way up to 70-75 bucks.
        5) as disclosed, should not effect the cash position nor the revenue numbers during those periods and now.

        unfortunately, as it stands right now, there is no information on how they are doing. with the resignation announcement, i recall that they mentioned that they would be coming in at the high end of guidance so perhaps there is some good news being withheld because of this investigation.

        my last thought is that when you have this type of shakeup in mgmt, you typically also see turnover tick up. the instability usually is too much for people to really accept - good or bad. therefore, i wouldn't be surprised at turnover upticking. this has generally been a concern of mine as this directly and indirectly has an impact on their successful delivery of projects. they have had high turnover and i believe if they aren't feeling it yet, they will feel it BIG TIME in the up and coming 2 quarters.

        i again, continue to say that this is rather dead money for a while. sure, you can probably book some trading range gains. sure, i think that it is "stable" baring any particular bad news from coming out.