Updated from 1:22 p.m. EDT

Shares of IBM ( IBM) sagged $3.98, or 4.6%, to $83.35 a day after the company admitted the Securities and Exchange Commission is investigating some of its accounting from 2000 and 2001.

Late Monday, Big Blue said the SEC wants more information about its recognized revenue for certain customer transactions. IBM said it believes the investigation is related to a separate SEC investigation of a customer of IBM's retail store solutions unit, which sells point-of-sale products.

This morning, market watchers were divided on the takeaway: Some cast the news more as a point of concern than cause for immediate worry. Others said it was a far more serious matter than was portrayed.

"I think right now the stock is holding in because several analysts came out today and said this is not a significant event and will wash away. I couldn't disagree more," says Richard Williams, an analyst at Summit Analytic Partners, an independent research firm. "I think it threatens a crisis of confidence in the stock and the market.

"Not a whole lot has been said about the scope and scale of the investigation," he adds. "But if there's any hint that it goes beyond retail, the stock will get clobbered on that alone, I think."

Williams, who holds a small short position in IBM, blasted the company's first quarter results in April, arguing IBM would have dramatically missed earnings estimates if it hadn't been saved by a weak dollar. He holds up the first-quarter numbers as an "egregious example" of the company's tendency to use one-time gains to meet Wall Street expectations, following on past controversies over how the booking of asset sales and gains on its giant pension fund factored into the bottom line.

And if IBM has to rely on accounting legerdemain to meet estimates, Williams argues, it no longer deserves to trade at a premium to its growth rate. Based on Monday's close of $87.33, the stock changes hands at a P/E of 20 for this year, while consensus estimates imply earnings growth of just under 10% this year. Next year's P/E is at 18, compared with an earnings growth outlook of a little above 10%.

Other analysts focused on the terse character of IBM's release. "We have our doubts that IBM is telling the whole story," says a note out today from John Gavin, head of research firm SEC Insight. "From IBM's word choice and limited follow-on guidance, our opinion is that IBM assessed the matter as material and thus felt compelled to disclose, but did so in a manner that simply meets the threshold for disclosure -- not openness. We've seen this manuever before from the likes of Qwest and EDS. Both companies previously said the SEC had contacted them regarding a 'customer' and both companies initially downplayed matters."

"We think that is happening here," continues Gavin. "Let's not forget that manipulations of revenue recognition -- particularly among tech companies -- has been a strong SEC red flag for years now and the SEC has challenged the company on this before."

"It's still trading at a hefty premium for a company that's not growing that fast, and if you take out those nonorganic items, I think you take away a chunk of the earnings," contends Williams. " Earnings could very easily be flat. And if that's the case, you're paying close to 20 times for a company that's not putting up a lot of organic growth. That's too expensive."

Still, the most common Wall Street refrain was that the investigation was not seen as a serious threat to Big Blue's shares.

"What I've noticed with certain bellwether stocks is that, while they have the mantle of being a bellwether, they're given more latitude, more leeway, even in the face of things that would otherwise cause concern with lower-profile companies," says Peter Conley, director of equity research at MDB-Analytiq. "The tolerance level's quite high until people decide a problem is really material."

"It says something about market psychology," adds Conley. "While in one sense the market learned from Enron, etc., it hasn't been inoculated." His firm doesn't own IBM shares, sticking more to mid-cap and small-cap names.

"Any SEC investigation must be taken seriously and can negatively impact a stock in today's environment," acknowledges Steve Milunovich, an analyst at Merrill Lynch. Still, he's betting in favor of IBM. "The probability is that either the investigation fizzles out or doesn't have significant impact on future results, so we would buy the stock on weakness," he writes. He has a buy rating on the shares and Merrill has done recent banking for IBM.

He pegs revenue in the retail solutions division at about a half-billion dollars -- a relatively small sum in relation to Big Blue's annual $88 billion in sales.

Agrees Deutsche Bank's George Elling, "The initial psychological effect of the announcement may scare some investors. Nonetheless, we are optimistic that the investigation will remain an isolated incident."

Elling notes that "SEC investigations, while not commonplace, certainly are part of the corporate landscape and often result in no formal charges," adding "we firmly believe in the credibility of IBM's management team and its years of corporate integrity." His firm has done recent banking for IBM.

At the Choice Long-Short fund, manager Patrick Adams shrugged off the news. "There's been a lot of chatter about their accounting in those particular views, so I view it as old info. Just because they're being investigated, I'm not sure that really means anything," he says. "I wouldn't trade it. If the stock was down at $81, $82, I would buy it on the long side, but in my opinion, the market hasn't reacted much."

Over the past few years, IBM has come in for plenty of flak on its aggressive accounting policies. Early last year, the company was roundly criticized for not fully disclosing how a one-time gain had helped it meet earnings expectations, specifically, the $280 million sale of its optical transceiver unit to JDS Uniphase on the last day of 2001.

IBM sought to muffle the criticism by releasing a detailed play-by-play of accounting practices in its 10-K filing in March 2002. The following month, the SEC acknowledged it had closed an investigation into IBM's accounting without taking any action.

On a related front, a March 2002 story in The Wall Street Journal said the SEC had asked IBM to consider making changes in its 1999 annual report. The SEC quibbled with the way IBM booked a gain on a $4 billion asset sale and raised questions about whether the company had properly informed investors about how much pension fund gains bulked up profit. However, IBM refused to make any changes.

IBM has said it's cooperating fully with the SEC's latest investigation.

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