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Technology Stocks : Network Associates (NET) -- Ignore unavailable to you. Want to Upgrade?

To: AlienTech who wrote (5657)	8/11/1999 12:54:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 6021

I would like to echo Alien's and Edwarda's comments. There are fundamental credibility issues here. And those questions exist on two fronts -- with investors and most importantly with customers. Alien and others have reported that Larson has eviscerated the R&D effort and that is a key element for any tech company. You cannot simply rely on yesterday's technology to carry you forward. But Larson's approach to management seems to be akin to Chainsaw Al's approach. Perhaps this explains the the 90% sequential quarterly drop in sales. Maybe NETA's products no longer appeal to customers. Larson has repeatedly told us that the shift in focus to Eurpean markets would result in in longer times to consummate deals and receive payment. Fair enough. But as I recall, he first started making those statements about a year ago. So where are the deals? And if Europeans are slow to sign, doesn't this mean that the domestic market has completely dried up? We were also told that NETA slowed shipments into the channel to try to get the DSO down. Why? After all, if the sales were real and NETA is sitting on a fair amount of cash there is no reason to be concerned with DSO - the company would be in a good position to fund it. It seems to me that the reason was that much of the sales revenue was bogus in the sense that there was no sell-through to customers, and no expectation of payment. Finally, we have been told that Y2K lockdowns are inhibiting sales. Now I am not technologically adept, but I must wonder whether this is yet one more subterfuge. After all, is network security something you would put on hold? Why haven't we seen lockdowns from the network hardware suppliers like CSCO and LU? I think Y2K is the last refuge of the scoundrel in technology. Then, of course, there is the issue of credibility with investors. I recall with particular distaste how Larson dissembled concerning the accretive value of the Network General deal. And I remember how he tried to tell us gullible little people that he would respond to the SEC mandate of restating prior earnings by cutting expenses so earnings would be unaffected. But he never dealt with the major issue -- restatement of earnings is an accounting change but cutting expenses requires either divesting yourself of unnecessary business functions or cutting staff somewhere. I am simply at a loss to generate any kind of earnings or cash flow model for this company because I have no feel at all what the truth may be. Credibility once again. One analyst was quoted last quarter at saying "I have no idea whether this company is worth $70 or $17". And when an analyst who is following the company makes a statement like that you know there are major issues of trust that must be resolved. TTFN, CTC