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Technology Stocks : Network Associates (NET)

NET 182.78

-2.2%

Jan 9 9:30 AM EST

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To: William F. Wager, Jr. who wrote (3681)	12/3/1998 1:55:00 AM
From: Chuzzlewit	Read Replies (1) of 6021

William, you noted: Awhile back some of the eggheads on Wall St. figured that NETA was making too many acquisitions and that there had to be some funny business with the accounting practices involved I guess that as this thread's resident "egghead" I ought to defend the criticisms. The problem is this: the plethora of "mergers" created the opportunity for a huge number of "non-recurring charges" which could easily result in producing very rosy-looking earnings. Write-offs from questionable accounts, in-process R&D etc. creates the problem of what the earnings really look like. I am long NETA because I feel that there is real power in this company, but I have no idea of what earnings look like (nor does anybody on the outside). So, as I pointed out a couple of months ago, what NETA needs is a few quarters without significant acquisitions so that the dust can settle. Certainly, the company has benefited from the acquisitions, but considering the potential for huge dilution, it remains to be seen whether shareholders will benefit. TTFN, CTC

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