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Technology Stocks : VeriSign (VRSN) -- Ignore unavailable to you. Want to Upgrade?

To: Gaffa who wrote (1130)	11/21/2000 3:06:46 PM
From: AugustWest	Respond to of 1285

chomping at the bit here doods. 52 wk. low can't be that far away. Only another 10 or so points. As Jimbo would say jajajajajajajajajajajajajajjajajajajajja

To: Gaffa who wrote (1130)	11/22/2000 12:54:12 AM
From: harabas	Read Replies (1) \| Respond to of 1285

COM STANDS FOR COMMODITY!!!Then why pay $17BILLION??? VRSN EPS is $12.29, OUCH.Anybody who bought this stock will be paying those greedy manipulators who orchestrated this deal in installment for a loong time. New economy is now defined by acquiring a company at all costs for the benefit of instant money.Executives normally issue themselves outrageous number of shares beforehand and then get them vested right away once the acquisition is done.They don't have to wait for $4 years.BEWARE!! Here's a spoiler!!! We've spilled a lot of bits and bytes at TheStreet.com castigating Wall Street analysts for the poor job they do advising their clients on which stocks to buy and which ones to sell. And for good reason: Even many of the best research analysts, especially in the technology field, are so swayed by the pressures of their firm's investment banking businesses that they rarely give the straight dope to brokerage clients for fear of offending existing and potential banking clients. This is why the handful of firms with either no investment banking business or not much to speak of get a fair amount of attention: They have fewer conflicts of interest. Sanford Bernstein, which doesn't underwrite stock offerings, comes to mind. Its Paul Sagawa was an early and lonely voice warning of troubles at the big networking companies like Nortel and Cisco. Lehman Brothers, much noted for the string of negative -- and successful -- calls its tech analysts have made, hasn't been a major player in tech underwriting. You'd have to strain to name a major stock-crushing recommendation change from the top three tech underwriters: Goldman Sachs, Morgan Stanley Dean Witter and Credit Suisse First Boston. The after-the-barn-door-has-closed downgrades from Merrill Lynch on Internet and semiconductor stocks have been downright embarrassing. That's why investors have to keep their eyes open for the relatively few unsung analysts who've emerged from the past few months with their reputations intact by saying quality companies had stocks that were too expensive. One is Christopher Russ, a 32-year-old networking software analyst at First Union Securities in New York. A month ago, when the rest of Wall Street still was high on shares of VeriSign (VRSN:Nasdaq) , Russ rated the software and domain names firm a hold, the closest most firms come to saying sell. Though his involvement wasn't publicized, Russ helped spark a downdraft in VeriSign's shares by fretting that the company's strategy of selling low-end domain-name registrations at its newly acquired Network Solutions unit wasn't kosher. "My concern was that the Street was giving a very good valuation to their domain-name registration business, which is likely to become a commodity business," says Russ, who's been talking down VeriSign since the shares traded for more than $150. VeriSign has been beset by concerns about its opportunities in China and a failure by the international standards-setting body for domain names to sanction the popular "dot-web" suffix, an approval investors had expected. VeriSign would have been a beneficiary of such a move as it dominates the registration business. Its shares closed Friday at $113.75.WOULD HAVE BEEN!!! Russ began covering VeriSign because of his interest in its public key infrastructure, or PKI, software business, basically the most popular product used by companies that distribute digital products over the Web to make sure that only their customers get the data they are buying. The irony is that when VeriSign agreed to buy Network Solutions, the former was worth much more but the latter accounted for most of the combined company's cash flow. Says Russ: "They got a company with very strong profits and cash flow," but much poorer margins and slower growth. How does VeriSign feel about Russ? Well, for starters, it doesn't list him on its Web site as an analyst who follows the company. Thomson Financial/First Call says 25 analysts follow VeriSign, one of whom rates it a hold. That's Russ, naturally. VeriSign lists the other 24 analysts, complete with their phone numbers. He isn't uniformly bearish, by the way. His two favorite picks are a highflier, Check Point Software (CHKP:Nasdaq) (no stranger to this column) and a fallen angel, F5 Networks (FFIV:Nasdaq) . Briefly, Russ says that Check Point has a way of continuously blowing out Wall Street's estimates, forcing analysts to raise them further. Russ predicts those estimates will rise again because of Check Point's dominance of software that runs so-called virtual private networks. That makes its current multiple of 77 times his estimate for 2001 earnings not so absurd, he says. As for F5, it makes load-balancing software for Web sites as well as an undervalued Web caching product, which makes the stock a cheap way to play those hot markets. The stock has swooned from $160 to below $23 (Russ upgraded at $27) and is at $32 today. The biggest negative to the stock is that the company's two primary competitors, Alteon Websystems and Arrowpoint, have been bought by Nortel and Cisco, respectively. This means that F5 will have a tough time selling into customers of Nortel and Cisco. Russ thinks these concerns are overblown and in any event are baked into the stock. What's relevant in the story of Russ and VeriSign is that his firm hasn't committed investment banking for VeriSign or any of the four other companies he covers, including Check Point and F5. First Union isn't well known as an investment bank at all. Identified more as a commercial bank, the securities unit is the product of merging the old Wheat First and Everen Securities (itself formerly known as Kemper Securities), a collection of regional brokerages. Add in "stealth acquisitions" of trading and research teams from the former Alex. Brown (now part of Deutsche Bank) and Lehman, and First Union is a potential up-and-comer. For the time being at least, its limited banking relationships let analysts like Russ make bold calls. While the situation lasts, that boldness gives brokerage clients the benefit of some honest stock picking. Because of the way Wall Street works, it's just not possible to build back the badly eroded Chinese Wall. All investors can do is look for the relatively few instances of analysts who call it like they see it.