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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: StocksDATsoar who wrote (70147)	2/2/2000 6:49:00 AM
From: puborectalis	Read Replies (1) \| Respond to of 108040

Legato up to $32 overseas.....hope we continue to have big volume in stock. Also....." Will EMC Buy Legato? Wednesday, 26th January 2000 Legato got one in the eye last week as its market capitalisation disappeared from under it on the news that it failed to achieve the analysts expectations for its fourth quarter - and that it was going to have to restate its earnings for the previous quarter. This led financial analysts the world over to readjust their ratings for the firm from a buy to something considerably less exciting. It also led to the company calling off its announced merger with Ontrack Data International - a merger that it had announced in November. Whilst this is obviously bad news for Legato, the chances are that not everybody will be feeling quite so blue on the news of Legato's misadventure. Veritas, one of Legato's main competitors, for instance probably isn't too upset on the news. And neither we expect is EMC - the storage market giant that has of late acquired quite a taste for a financial bargain. EMC is the dominant force in the storage marketplace and over the past six months has set about re-establishing itself as a storage software solutions company. To this end the company has been on the acquisition trail. Buying up Data General mid-1999 and a couple of smaller players - Terascape and Softworks - over the past couple of months. EMC however has got a big job on its hands. It desperately wants to become the ultimate one-stop, storage shop, but it is still a long way from this Nirvana - and its predicted $12 billion revenue target by 2001. So, what should it do? Legato, at its new bumper-bargain, knock-down price could make a lot of sense for the company. Breadth is something that EMC is keen to establish, as we saw recently with its Data General acquisition, and through the purchase of Legato, that is something it would very much get. In the same way as Veritas has shifted from high-end server storage into the PC market with its acquisition of Seagate's software arm (NSMG). EMC would be able to achieve a similar level of diversity through a Legato acquisition - and that must be a tempting thought. That doesn't mean that EMC will buy Legato however. It's just that it would make a lot of sense for both parties. And let's face it EMC isn't exactly short of cash."