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Technology Stocks : Network Associates (NET)
NET 173.44+0.1%Jan 23 9:30 AM EST
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To: Chuzzlewit who wrote (1727)11/26/1997 4:59:00 PM
From: Terry Davis  Read Replies (1) of 6021
 
Paul,

I will concede that the response to the merger has been less than spectacular. But let's all face it, it's a done deal. My intent was merely to point out that McAfee is a train running out of track. They have made a point of warning of increased competitiont in their 10Qs.

Look at the qtr-to-qtr top line growth of MCAF over the last few quarters it's gone from 24% to 18% to low single digits in the most recent quarter. I hear all this talk about 80% growth, where is it? EPS is projected to grow by approximately 40% in the coming year. You provided a well thought out DCF and CAPM argument which is great, but you know very well that it's market multiples and comparable M&A transactions that drive deals, not finance theory. 5 times TTM revenues is not a huge number, nor is 35 to 40% an unreasonably high premium for a company growing in the 20 - 30% range.

Cheers,

Terry

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