The E-Numbers Game

Net star MicroStrategy is forced to restate its accounts. Will more Internet businesses be next?

Accountants like to call it "earnings management." Regular folks prefer terms like "cooking the books." Whatever the term of art, there's been an increasing tendency by corporations, particularly dotcoms, to bend the rules of accounting to make their numbers look good.

Last week the rules snapped back with a vengeance when MicroStrategy, a supercharged Vienna, Va., software and Internet company, was forced to restate drastically results it reported in 1998 and 1999. MicroStrategy's stock, which had risen like Icarus--from $7.34 to $333 over the past 12 months--suddenly fell from the sky, losing more than 60% of its value in a single...

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