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Technology Stocks : Network Associates (NET)

NET 196.20

-0.1%

Nov 19 3:59 PM EST

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To: jim detwiler who wrote (4313)	3/18/1999 12:32:00 PM
From: Just_Observing	Read Replies (1) of 6021

Here's an interesting view of NETA. This post from 2 days go was positively prescient NETA's grim year is Management's Fault by: Curiouser_and_Curiouser Bill Larson is fond of racing and his motto is to drive fast and take risks. He did not disappoint with Mcafee. With NETA, the stock has done nothing for two years (while the Nasdaq is up nearly 70%) and there is a huge short interest. On top of it are accounting problems caused by the SEC and the very generous write-offs that NETA was taking. We never quite knew how the business was doing. NETA could sell software at cost in retail and somehow the quarter would end up great if you did not focus on the write-offs. This coming quarter will be the second clean quarter without write-offs in quite a while. What will it show? Why doesn't the street believe that NETA will have a good quarter when told by Bill Larson himself as late as Feb 24th. Perhaps, the street knows that NETA pushes a lot of stuff in the last few days and this is confirmed by high DSOs. In any case, I will buy calls if the sell-off gets much worse. There is no point in holding a stock down 35+% for the year while the Nasdaq is rallying everyday. Will the glory days return for NETA? Sad to say, it was McAfee who had the glory days. NETA's days have been marginal with a few glorious spurts. Will Windows 2000 close some of the utility space that NETA functions in ? NETA has a market cap of around 5 to 6 billion. If MSFT were to get NETA's sales, that would translate to a market cap of 20 to 25 billion (since MSFT trades at a price to sales of 20+). Will MSFT be generous and leave room for NETA to grow? In spite of NETA's constant kissing up to MSFT, I don't think that Bill Gates values NETA to the tune of 20+ billion. Sooner or later, NETA will get in the way of the Microsoft steamroller. What really makes me mad that the stock price could easily be twice its present value if NETA had not engaged in relentless price-slashing with Symantec. You have to be stupid to indulge in a battle to the death with a much smaller foe. Symantec is one-sixth or one-seventh the size of NETA and yet NETA indulges in a blistering price-war. Why? What do they gain by knocking out one company when they are competing with so many others. One of the tests of leadership is to know when to end a war. There is no dishonor in declaring a truce if your shareholders can benefit from it. As they say, "Living well is the best revenge." Instead we have Capt. Ahab taking us down. In the interest of shareholders, please settle ongoing disputes and focus on the challenges at hand. The Microsoft menace is about to roll NETA into dust. You need to make alliances and make money so that you can afford the massive R&D that it will take to repulse a challenge from MSFT. I am glad that NETA will working on LINUX but that effort will provide results in the long term. In the short term, we are all getting screwed. Enough of these ramblings. Good luck to all. Let's hope that NETA can pull off this quarter inspite of many indications to the contrary. And I promise not to ramble again.

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