lnp3 at panix.com
Wed Feb 20 10:06:17 MST 2002
NY Times, February 20, 2002
Shares of Computer Associates Fall as Prosecutors Begin Inquiry
By ALEX BERENSON
Shares of Computer Associates International fell sharply today, dropping
more than 20 percent at one point, following reports that federal
prosecutors are investigating the company.
Two people close to the investigation said federal prosecutors in Brooklyn
had opened a preliminary inquiry into whether Computer Associates
deliberately overstated its profits to inflate its stock price and enrich
its senior executives.
The inquiry comes in the wake of the collapse of Enron, which has caused
the Securities and Exchange Commission and prosecutors to put new scrutiny
on companies that use unusual accounting practices.
Around midday, Computer Associates' shares were down $3.99, or 15.8
percent, to $21.32, after trading as low as $19.47.
Since October 2000, Computer Associates, a giant software company based in
Islandia, N.Y., has reported its financial results using a nonstandard "pro
forma" accounting practice that makes its profits and sales seem much
larger than under standard accounting rules.
Newsday, August 15, 1995, Tuesday
The House That Wang Built;
Or, How to Succeed in Business by Really, Really Trying
BY WILLIAM B. FALK
A THREE-dimensional globe rotates slowly on a computer screen, then
contracts and flattens into an outline of the United States. The skyline of
a city looms up from the virtual landscape, as if seen from an incoming
"Well, look at that," George Bush says.
The 41st president of the United States is peering at the screen while
standing next to Charles Wang, the chief executive officer of Computer
Associates International. They're in an exhibition hall in New Orleans
packed with 15,000 of the Long Island-based company's customers, business
partners and employees. Bush reaches for the mouse directing the
demonstration of Computer Associates' next product, which will help
technicians pinpoint problems in vast computer networks. "Don't touch it,"
Wang says, proprietarily. Bush pulls his hand back, and the two laugh
awkwardly. On the screen, an unseen intelligence continues to take viewers
on a 3-D ride into an individual city, into a single skyscraper within that
city, and finally into the guts of a single, glitch-ridden computer.
Bush gives his head a golly-gee shake and turns to find Wang, in a jaunty,
double-breasted suit, already cutting a swath through the crowd of gawking
onlookers. As the pedigreed former president follows on the heels of his
employer for the day, there's no mistaking the message of this
choreographed joint appearance:
It's Wang's world now, on the computer screen and off.
It's a world in which a former supermarket stock boy with an undiluted "New
Yawk" accent has the clout to hire a Yale-educated former president to
entertain his customers, as Wang did for Computer Associates' annual
customer conference in mid-July. (Bush's standard corporate fee for a
speech and a walk-around is about $ 80,000.)
It's a world in which an immigrant who once could not afford the 32-cent
lunch at Brooklyn Tech High School now commands the second-largest
independent software company on the planet, and who was paid $ 8.6 million
in salary and stock awards last year. He's amassed more than $ 500 million
in CA stock. He blows off steam by playing basketball on an indoor court at
his 60-acre estate on Nassau County's North Shore.
It's a world in which Charles Wang, at 50, is widely recognized as one of
the lions of the tooth-and-claw software jungle, his growing mystique
drawing attention from national magazines such as Newsweek as well as from
passersby on the streets of New York City's Chinese neighborhoods. People
in the software industry have come to see him in the same light as
Microsoft's legendary Bill Gates.
"Wang has some magic of some kind, and nobody knows what it is," says Paul
Mason, an expert on software companies for International Data Corp., a
market research firm. Mason admits he has expected Computer Associates to
run into serious trouble for several years. "After what he's managed to
pull off, he's held in awe."
This year, Computer Associates racked up a 22 percent increase in revenues,
to $ 2.6 billion. Its stock, selling at $ 31 a little more than a year ago,
soared into the low $ 70s. Wang pulled off the second-largest takeover in
software history, a $ 1.6-billion buyout of a rival, Legent Corp. of
While financial and industrial institutions in the New York area are
downsizing, Wang is hiring and throwing parties to celebrate quarterly
earnings at which employees feast on platters of shrimp and roasted meats.
With 1,500 employees at its Islandia headquarters, CA has become one of
Long Island's biggest employers, and plans to add about 300 employees
locally this year. Symbolically, at least, CA has become the most important
company on the Island, representing the high-tech future that some envision
as a replacement for the disappearing defense industry.
It is, as much as any company in the United States, the creation of a
single individual, wholly shaped by his personality: aggressive, shrewd,
and staffed by workaholics who follow Wang's lead or are sent packing.
Wang's favorite measure of success is "revenue per employee." That number
is going up rapidly, too: from $ 303,000 a year ago to $ 363,000 in 1995.
"Our time has come," Wang says. He shrugs his shoulders as if he always
expected the four-person company he launched in 1976 to become an
international empire, which friends say he did expect. "When you're this
successful, people have to recognize it," he says. Wang's grin finishes the
sentence for him; even if people have to grit their teeth while doing it.
Marxism mailing list: http://www.marxmail.org
PLEASE clip all extraneous text before replying to a message.
More information about the Marxism