Wednesday, August 01, 2001

Annals of Business Life

I've been following the news stories in the Times Business section about AremisSoft ever since the company claimed it had discovered the key to wealth in Bulgaria. According to its initial press release, the company was all set to sell the Bulgarian government something like a hundred million dollars worth of software - and then the Bulgarian government said, hey, wait a minute, we don't have that kind of money. It was all a scam, but as soon as this scam broke the surface in the news, the company execs and some brokers who'd been shilling AremisSoft stock counter-attacked, claiming this was a company of exemplary prospects being viciously attacked by shortsellers. Well, today's news is that the company "misplaced" its profits. Darn it, they'd stuffed that money in some old jar in the kitchen and just couldn't remember where. More Trouble for Maker of Software

Here's my favorite quote from the article:

"In addition, the company said that Michael Tymvios, its chief financial officer, had resigned for health reasons and that its auditors could not find $5.4 million that AremisSoft booked as revenue last year. AremisSoft said it had asked PKF, its auditor, to review its books, but that the inquiry had been delayed because AremisSoft had been unable to contact its own executives to get information that PKF needed to complete the review."

Apparently everybody connected with AremisSoft has simultaneously been afflicted with telephone aphonia - the article goes on to list the unreturned calls to the president, the brokers who were shilling the stock, etc.

AremisSoft is just the most extreme version of a quiet re-evaluation of the profits that were made by companies in the bubble years. There was a WSJ article about that last week, which I can't link to, since I am not a WSJ subscriber. But do you hear any contrition from the bubble boosters, the James Glassmans (of the infamous Dow36,000 book)?
No. Contrition, my dear, is for losers.

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