Legato Runs into Trouble with Nasdaq - Company Financial Information

ENT, May 24, 2000

Legato Corp. (www.legato.com), a vendor of storage management software, gained some negative attention recently as a result of financial reporting and market listing issues.

Legato had its listing altered on the Nasdaq for its delay in the publishing of its earnings report. Legato suffered a setback from changes in accounting rules and the revelation that some sales representatives were involved in under-the-table deals. Both factors contributed to the delay. Legato can still be traded through Nasdaq, but the company is listed with an "E" after the symbol, signifying the company is delinquent in required filings with the Securities and Exchange Commission.

So what does the "E" mean for prospective traders or the health of the company? "Nothing," says Steve Duplessie, an analyst at Enterprise Storage Group (www.enterprisestorage.com). "That company is a great company," he says. "They just ran into some bad luck"

Steve Widen, an analyst at IDC (www.idc.com), agrees: "It really isn't a question of the products." Despite the organizational and market problems, "It really shouldn't matter," he says.