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Technology Stocks : BMC Software
BMCS 0.008200.0%Nov 14 3:58 PM EST
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To: Chuzzlewit who wrote (1042)1/6/2000 9:46:00 AM
From: Edwarda  Read Replies (1) of 1492
 
There are no hard data yet. As you know, Max didn't want to take Q&A for lack of data such as product line revenues--which means he can chat about Y2K but has nothing to back up the suggestion yet. Obviously, there have been and will continue to be Y2K-related distortions, but I don't think that they can fully account for the shortfall, especially as the previous two quarters met the estimates on lower deferred revenues. That's three quarters in a row that a company that relies on a small number of complex deals has seen business coming in below plan, a situation that gives me some pause.

I have heard from several customer sites (a small and anecdotal sample, admittedly) that CA has been very aggressive in pricing for the acquired Platinum products in competitive replacement deals. The result has been their getting some business away from BMC and definitely slowing down the decision process above and beyond the slowing related to Y2K.

Also remember the blowout at BOOL? It suggests that the company used up a lot of its pipeline ahead of the deal, a pipeline that is taking time to rebuild.

Both BMCS and CA are migrating their businesses toward Internet solutions. It appears that CA is having greater initial success.

On estimates of $1.75 and $2.10 for this fiscal year and next, the stock needs a catalyst to get it to move up again and I don't see one in the near term while MIPs shipments are relatively slow. Meanwhile, the momentum investors are bailing. You need an investment horizon of at least a year to be a buyer right now IMO.
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