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Technology Stocks : NENG: Network Engines, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (100)	12/17/2003 4:46:12 PM
From: Gus	Read Replies (1) \| Respond to of 186

The ambulance chasers are back again running after any broken chart in the hopes of a quick payoff. The safe harbor laws were supposed to reduce this kind of frivolous lawsuits. Defendants failed to disclose, however: (i) that the Company was in the process of renegotiating its distribution contract with EMC; (ii) that EMC was demanding price concessions to bring its agreement with Network Engines in line with the pricing that Network Engines was providing to other customers; Who in his right mind would negotiate in public or even disclose a contract change before the new contract is signed? (iii) that the new distribution contract with EMC would negatively impact the Company's future financial performance; NENG has only provided quarter to quarter guidance since I started buying it in late 2002. I would venture that they have had this policy since their back-to-back restructurings in 2001. Since the contract amendment did not affect the 1Q2004 quarter -- for which guidance was provided during 4Q2003 CC -- and they did not provide any guidance for 2Q2004 and beyond there is no qualifying guidance for future financial performance involved here. iv) that the Company would not be able to sustain the growth in its gross margins as a result of the amended contract; This is just dumb and contradictory. NENG couldn't possibly have projected gross margin growth since a) gross margin declined during the most recent quarter but still stayed within their previous 19%-21% guidance, b) they only provided quarter to quarter financial guidance for 1Q2004 with gross margin expected to stay in the same 19%-21% range, and c) they were already in negotiations with EMC during the CC which, as noted, has become the traditional venue for them to provide quarter to quarter guidance.