Homestore says it overstated 2000 sales
In what is shaping up to be one of the Internet's most dismal accounting fiascoes, the real estate site says it overstated sales by at least 17 percent.
The real estate site also said its overstated revenue for 2001 was greater than it had previously announced.
The company, which first alerted Nasdaq to the overstatement for 2000 on Feb. 13, now says it saw between $185 million and $191 million in revenue instead of the $230 million it originally reported in documents with the Securities and Exchange Commission.
Homestore said that revenue for the first three quarters of 2001 was overstated by about $113 million. That figure is $18 million more than the company's previous estimates, which were based on the errors it found in the way it calculated its online advertising revenue. The increase in overstated revenue is a result of Homestore also finding mistakes in the way it calculated offline revenue as well.
"The audit committee's internal inquiry could result in additional restatements," Homestore warned in its news release.
Once lauded for using the Internet to tap the enormous real estate market, Homestore is quickly turning into one of the Net's most dismal accounting fiascos. The decline of the company, which is backed by Cendant, began six months ago and has included an ugly management shake-up, a multitude of shareholder suits and at least two rounds of layoffs.
Nasdaq has halted trading in Homestore since the company first warned it overstated 2000. Before then, the company's share price was 74 cents, off more than 98 percent from a 52-week high of $37.16.
"When trading resumes, our stock price may experience large and rapid fluctuations," the company said in its statement.