San Diego’s troubled Peregrine Systems issued bad news after the market closed last Thursday. Before the news was announced, stock retreated 9 cents to 50 cents.
As a result of the issuing of the news release, on Friday stock fell by another 22.5 cents from the Thursday’s regular-hour close to 27.5 cents.
Peregrine’s news release revealed that the revenue overstatement for 2000, 2001 and the first nine months of 2002 was US$250 million, not the US$100 million that had been confessed in May.
With this news the company revealed accounting shenanigans that rival those of WorldCom. The company admitted in a press release that they should have accounted for its accounts receivable factoring arrangements as loans instead of sales of receivables without recourse.
