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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: adad69 who wrote (82056)	2/7/2000 10:38:00 PM
From: kendall harmon	Respond to of 120523

VNWK, overdone on the downside today and a good bounce candidate <<Visual Networks to Buy Avesta for $328.5 Mln in Stock (Update3) (Updates WITH closing share price, recalculates value of transaction.) Rockville, Maryland, Feb. 7 (Bloomberg) -- Visual Networks Inc., whose software measures efficiency of data networks, agreed to buy network troubleshooter Avesta Technologies Inc. for about $328.5 million in stock, sending its shares down 21 percent. The shares of Visual Networks fell 13 1/16 to 50 5/16 in Nasdaq Stock Exchange trading of 3.47 million shares, more than seven times its three-month daily average of 448,900. Earlier, the shares traded as low as 46 1/4, after the company said the acquisition would halve its earnings this year. Avesta's software monitors traffic on networks to detect errors and identify causes. Visual Networks wants to sell a broader range of network products, and closely held Avesta's software is important to fast-growing electronic-commerce companies that can't afford to lose customers to glitches, Janney Montgomery Scott LLC analyst Richard Sherman said. ``It's important for e-commerce companies to find out what is wrong, instead of people abandoning the shopping cart' when they encounter problems with a Web site, Sherman said. He rates Visual Networks ``buy.' Visual Networks will exchange about 6.53 million shares for Avesta, and it said the price will increase if Avesta meets undisclosed performance targets. Visual Networks expects to complete the purchase early in the second quarter. No layoffs are expected among Avesta's 165 employees, said Rockville, Maryland- based Visual Networks, which employs 250. Visual Networks now expects to earn 44 cents per share in 2000, less than its previous estimate of 83 cents, as it spends heavily to sell, market, research and develop Avesta products, Chief Executive Scott Stouffer said, without offering details. The company expects to earn 93 cents in 2001, down from its $1.17 estimate and the $1.21 average estimate of six analysts surveyed by First Call Corp. The purchase will add to earnings after the first quarter of 2002, he said. Through Friday, Visual Network's share price had risen 76 percent in the last year. Competitor Micromuse Inc. rose 5 1/2 to 192 5/8. About 60 percent of Avesta is owned by four venture-capital companies: Kanata Research Park Group, Information Associates, AT&T Venture Fund and Trident Ventures, spokeswoman Debra Eisenberg said. Avesta employees, including Chief Executive Kam Saifi, own the remainder. Saifi will join Visual's board after the transaction closes. Avesta, which is based in New York, has four U.S. offices and three more overseas. The company was founded in 1996. >> quote.bloomberg.com