What's with

Scient's

(SCNT)

19% hit yesterday? The stock tumbled 21 11/16 to 91 1/8. You could say it's merely catching up with the declines of rival e-consulting firms, including

Sapient

(SAPE)

and

Viant

(VIAN)

, which have suffered even bigger drops from their highs. Or you could say it's feeling the ripple effects of an overriding concern for the financial health of e-tail and e-commerce start-ups.

Dot-com start-ups play an important role at Scient -- as much as 40%, according to

Lehman Brothers

. That compares with less than 20% for Sapient and Viant. "Their business model works great when all these dumb dot-coms are getting oodles of money," says one longtime Scient short-seller, "but it will work equally poor when the dot-coms are going away."

Understood, but is that a reason to pick on Scient and not the others? The whole logic of investing in consulting companies -- the high-cost nature of those companies -- makes them somewhat suspect as sustainable growth companies. Scient, meanwhile, is proud of its reliance on e-commerce. It believes its Internet work is in a fast-growing part of the economy, and most of its start-ups are "well-financed B2B plays."

However, should it really be trading at roughly twice the multiple to revenue of Sapient and Viant? (Our short-selling source -- surprise, surprise -- doesn't think so.) All three are growing quickly, but unlike Scient, Sapient and Viant are profitable. What's more -- and this is important -- last quarter Scient's Selling, General and Administrative expenses, or SG&A, as a percent of revenue, were nearly double those of Sapient, which has twice the sales of Scient. SG&A is a catchall for a variety of salaries, marketing, recruiting, technology and other expenses. It's also a place companies can stuff expenses that could otherwise be considered cost of revenues, therefore lowering the all-important gross margin (the difference between revenues and cost of revenues). Analysts often ignore high SG&A because it's often seen as spending for the future.

Why, however, is Scient's SG&A

so

TST Recommends

much higher than Sapient's?

According to a spokeswoman, "We are investing heavily in our infrastructure, knowledge management and colleague training."

So are the other companies. What makes Scient different? For an answer, the spokeswoman referred me to analysts who follow the company. (However, this column has a longstanding policy of viewing the company as the bull and the short-sellers as the bear. Besides, analysts too often are conflicted by investment banking and other biases.)

As for the short-seller, he has lots of theories but no solid explanation for Scient's higher-than-its-peers SG&A. But let's just say that, along with the high reliance on dot-coms, is one reason he didn't cover his Scient short while the stock was rising.

Lernout Lookout

Didya see that

Microsoft

(MSFT) - Get Report

commercial during last weekend's

NCAA

basketball tournament for a PC software that recognizes your voice? One of the big hopes (or was that hypes?) of

Lernout & Hauspie

(LHSP)

was that Microsoft, which has an investment in Lernout, would use Lernout's voice-recognition software. Is that what's in Microsoft's new voice-recognition software? According to Doug Henrich, manager of Microsoft's speech product group, through a spokesperson: No.

Be sure to check out the first part of Herb's column today.

Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

herb@thestreet.com. Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.