Tim, I find the possibility of someone buying Network Associates as a danger to Checkpoint, especially if the buyer is Microsoft or Cisco. It's just listed here as a rumor, but these things sometimes turn out to be true. Still, the worse case of MSFT or Cisco somehow seems unlikely.
I am again wondering if it's wise to hold shares through earnings. Never been a good idea in the past. A rumor like this and really great earnings could put us down 10 points. Would it help more if they missed earnings? <g>
Regards, Mark
Network Associates rises on buyout rumors
By Bloomberg News
Special to CNET News.com
July 14, 1999, 5:10 a.m. PT
news.com
Shares of Network Associates, the No. 1 maker of security software, rose 8 percent on speculation that it will be acquired by a larger rival.
Network Associates rose 1.44 to 19.5 in trading of 19.5 million shares, about four times the three-month daily average. It was the fifth most active stock in the United States. The shares also increased 10 percent yesterday.
The rise comes as Network Associates shares have plunged 71 percent this year, making them the worst performer on the Nasdaq 100 Index. The maker of antivirus and network management software has seen its sales fall dramatically amid excess inventory and weak demand.
Now some investors believe the company is an attractive takeover candidate for rivals such as Microsoft, Computer Associates, Novell, and Cisco Systems, said Aaron Scott, an analyst with Advest.
"The rumor is that somebody's looking to take over Network Associates," said Scott, who rates the shares "market perform." "I don't really put a lot of faith into it."
Microsoft has been making large investments in cable TV companies while Computer Associates recently completed a $3.5 billion purchase of Platinum Technology.
Microsoft, Computer Associates, and Novell executives declined to comment on the speculation. Network Associates and Cisco executives weren't immediately available for comment.
Call options for Network Associates were also among the most active in U.S. options markets. Some 18,000 call options traded, more than half the recorded open interest of 32,000 contracts. Holders of call options benefit if the stock price rises.
The most active option was the August 20 call, which would give the holder the right to buy the stock for $20 a share next month. Some 4,800 August 20 call contracts traded, up from 110 yesterday. The option hadn't previously traded. The August 20 calls rose 0.875 to 2.125.
Network Associates is expected to release its second-quarter results on July 21. The company should lose about $1.12 per share on revenues of around $20 million, Scott estimates.
"They have earnings coming up and people may be positioning themselves for the announcement," said Joe Sunderman, a research analyst at Cincinnati-based Schaeffer Investment Research.
Copyright 1999, Bloomberg L.P. All Rights Reserved. |
