Just To Reset/Clarify: Why This Blog Exists

An anonymous former Mattersight employee offered a comment a few posts back -- and it made some very solid points. I do hope this site brings a smile to the faces of the "regular" line and staff employees of Mattersight -- undoubtedly hard-working, decent, honest, thoughtful folks -- to a person.

But I do not write the site simply to poke fun at breathless claims of "millions of algorithms" -- as many software vendors make similarly-silly claims. No -- to reset this -- I write because I am concerned about material mis-statements (over several SEC reporting periods) that vastly increased GAAP losses per share, from continuing operations. See chart at right.

I do think something important needs overhauling, at Mattersight.

For a company led by a CPA, it strains belief to imagine that Mr. Conway, and his executive team booked preferred dividend accruals accurately for perhaps eight-plus years, or 32 straight quarters -- and then suddenly "forgot them" -- when it was time to pull the three year financials, as restated for discontinued operations, during the divestiture of the ICS businesses. Mr. Conway "forgot" them?! Really?! Did the dog eat his homework, in grade school (for three straight years) too?! C'mon man.

No -- Mr. Conway proceeded next to file three additional SEC reports, re-asserting the "error". Grant Thorton has labeled this a material weakness in Mattersights financial controls -- and cannot give an opinion that Mr. Conway's measures to "correct" it are adequate. Why? Because Conway and Co. could always "forget" something else.

The lapse of memory vastly inflated the GAAP loss from continuing operations per share in 2011.

That's a very, very suspicious fact pattern -- all the more so, when coupled to the regular selling by executive officers.

That is why this blog exists. Be very careful out there.