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To: nokomis who wrote (90393)	3/28/2000 12:59:00 AM
From: puborectalis	Respond to of 120523

Legato Shares Rise After Web Site Says EMC May Acquire Company By David Ward Legato Shares Rise After Web Site Says EMC May Acquire Company Palo Alto, California, March 27 (Bloomberg) -- Legato Systems Inc. shares rose 23 percent after an Internet site specializing in market rumors said the data storage software maker could be acquired by EMC Corp. Legato shares rose 8 7/16 to 45 11/16 after a posting on Jagnotes.com's rumor site said, without citing sources, that EMC will pay up to 'the mid $60s' per share for the company, about a 45 percent premium over today's closing price. EMC has been mentioned on Jagnotes as a possible acquirer of Legato at least three times since Legato shares tumbled more than 45 percent on Jan. 20 after the company said it would miss earnings estimates for the quarter and that future growth would slow. No merger plans have been announced, and analysts questioned whether EMC was in talks to acquire Legato, particularly since EMC is still in the process of assimilating Data General Corp., which it purchased in last October for $1.22 billion. ``EMC is already in storage management business in a big way, so it's conceivable they would look for acquisitions, but I don't know why an EMC rumor would be any more valid today,' said David Breiner, an analyst at Prudential Volpe Technology Group. Spokespeople at EMC and Legato declined to comment. Legato may also miss some earnings estimates for its quarter ending March 30, as its expenses rise, analysts said. Analysts at CIBC World Markets Inc. and Salomon Smith Barney have lowered their earnings estimates for Legato, citing rising expenses. ``While our revenue forecast appears to be on track with previous guidance, expenses are ramping higher,' CIBC analyst Melissa Eisenstat, who has a ``hold' rating on Legato, wrote in a note to clients. Eisenstat lowered her estimate for Legato earnings this quarter to 8 cents a share, from a previous estimate of 11 cents a share. Legato is expected to report earnings sometime during the third week of April. Legato's expenses are rising as it bolsters its sales staff and as its legal costs rise as it faces more than a dozen shareholder lawsuits filed after the company said its fourth- quarter earnings would miss estimates, analysts said. Legato is ``expending resources dealing with those the rash of class action suits,' Breiner said. The suits, filed on behalf of shareholders, seek class action status for claims that Legato and its top officers of purposefully concealing its true revenue and earnings prospects in the third and fourth quarters of last year in order to bolster its stock price to fund an acquisition and to allow company executives to profit from the sale of stock.