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Technology Stocks : Network Appliance

NTAP 113.07

-0.9%

3:59 PM EST

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To: DownSouth who wrote (3499)	6/15/2000 3:04:00 PM
From: HDC	Read Replies (2) of 10934

DS, RE: Reason behind yesterday's drop. Here is Prudential's explanation for yesterday's drop: NTAP: NTAP UPDATE, BUY NTAP ON WEAKNESS o NTAP shares declined 12% yesterday on comments made by NTAP management at a conference that they would not be surprised if bookings for the FQ1 fell below revenue. o We do not view this as weakening business momentum. FQ1 is seasonally a weak quarter and the company normally plans for book-to-bill ratio of <1 in FQ1. o Our follow up with management confirms that there has been no change in guidance and management is comfortable meeting current expectations. We continue to expect revenues of $220M (up 113% Y/Y) and $250M (up 101% Y/Y) in FQ1 and FQ2, respectively. o Further, pricing environment remains benign, and NTAP experiences no material component issues. As a result, we would not rule out a possibility of an upside to our 59% GM estimate for the quarter. o Net/net, current business trends are tracking to plan, demand remains seasonally strong, and our outlook on the company has not changed. We would use the weakness as a buying opportunity. These referenced comments were probably made at the Bear Stearns conference which is being held this week. We're back up to $81+ as I type!!!! Are you still planning to attend the NTAP program in Atlanta next week? Duncan

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