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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: chunmun who wrote (25975)	7/13/1999 5:55:00 PM
From: taxman	Respond to of 74651

Network Associates Rises on Acquisition Speculation (Update1) Santa Clara, California, July 13 (Bloomberg) -- Shares of Network Associates Inc., the No. 1 maker of security software, rose 8 percent on speculation that it will be acquired by a larger rival. Network Associates rose 1 7/16 to 19 1/2 in trading of 19.5 million shares, about four times the three-month daily average. It was the fifth most active stock in the U.S. The shares also increased 10 percent yesterday. The rise comes as Network Associates shares have plunged 71 percent this year, making them the worst performer on the Nasdaq 100 Index. The maker of anti-virus and network management software has seen its sales fall dramatically amid excess inventory and weak demand. Now some investors believe the company is an attractive takeover candidate for rivals such as Microsoft Corp., Computer Associates International Inc., Novell Inc. and Cisco Systems Inc., said Aaron Scott, an analyst with Advest Inc. ''The rumor is that somebody's looking to take over Network Associates,'' said Scott, who rates the shares ''market perform.'' ''I don't really put a lot of faith into it.'' Microsoft has been making large investments in cable TV companies while Computer Associates recently completed a $3.5 billion purchase of Platinum Technology International Inc. Microsoft, Computer Associates and Novell officials declined to comment on the speculation. Network Associates and Cisco officials weren't immediately available for comment. Call options for Network Associates were also among the most active in U.S. options markets. Some 18,000 call options traded, more than half the recorded open interest of 32,000 contracts. Holders of call options benefit if the stock price rises. The most active option was the August 20 call, which would give the holder the right to buy the stock for $20 a share next month. Some 4,800 August 20 call contracts traded, up from 110 yesterday. The option hadn't previously traded. The August 20 calls rose 7/8 to 2 1/8. Network Associates is expected to release its second-quarter results on July 21. The company should lose about $1.12 per share on revenues of around $20 million, Scott estimates. ''They have earnings coming up and people may be positioning themselves for the announcement,'' said Joe Sunderman, a research analyst at Cincinnati-based Schaeffer Investment Research Inc. regards