Restatement

Do this. Or...do this! Or...do thissssss.

Okay, we restated it 3 times. Each time was a bit different. Did you notice?

Well, in Street parlance, a restatement happens when a company has somehow wrongly reported its financials in one form or another, and the auditors believe that the bottom lines are confusing enough, such that the company must file a do-over and restate what they thought they'd said accurately last quarter.

That is, the company is now having to recognize all of its marketing expenses as expenses. They can't capitalize them and amortize them over the expected 3-year life of the customer who subscribes monthly to their service. They had been taking that $100 million marketing spend in the quarter and, on the income statement, only recognizing 1/36 of it per month, or 3/36 per quarter, or 1/12th, or about $8 million. Instead, the auditors are saying that they have to recognize all of it in the quarter in which the money was committed to be spent.

So now the company's CFO and accountants have to go back and redo their financials to reflect the much larger losses on the income statement than what had previously been thought. And that's usually really bad for the stock price, so...look out below when the first post-restatment requirement has been blared broadly, and the first price prints.