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Technology Stocks : Security Dynamics SDTI -- How much money can they make?? -- Ignore unavailable to you. Want to Upgrade?

To: Bobo who wrote (340)	4/2/1998 1:44:00 PM
From: Maverick	Read Replies (1) \| Respond to of 1614

considering making adjustments to its business plan implies lost sale not delayed sale SECURITY DYNAMICS TECHNOLOGIES INC. (SDTI) 42 1/2 CLOSED. Shares of enterprise network and data security solutions provider are expected to tumble this morning after the company warned that Q1 results will come in below market projections. According to Security Dynamics, it expects an operating Q1 profit of $0.14 a share, at least a nickel below Wall Street projections, compared with year-ago profit of $0.12 a share. While revenues for the period are expected to increased 37% to approximately $39 million, from $28.4 million in the year-ago period, a larger uptick in revenues was anticipated given that it had revenues of $39.73 million in Q4. According to SDTI, the failure to close on certain sales that had been expected to occur in the period is the primary reason for the earnings miss. And while this failure to close on certain business suggests that these sales are likely to materialize in a latter quarter, the company is considering making adjustments to its business plan, implying that these sales may not materialize at all. Hence, the stock is expected to receive a major haircut this morning, although a trade has yet to go through at the $30 level. From Briefing.com

To: Bobo who wrote (340)	4/2/1998 4:05:00 PM
From: Trader Dave	Read Replies (1) \| Respond to of 1614

Boy, What a day to be travelling!. I feel like I got kicked in the stomach. The street psychology is a mess, because they took no questions on the conference call and basically said - we're not tellin' you anything until our q1 conference call on the 21st. that's scary. Here's my take: I've always thought this quarter (and June) were somewhat risky because of RSA. Al Sisto will eventually help, retooling sales approach and moving from tool kit sales to server sales will ultimately result in more predictable revenue streams. In addition, simplifying their licensing and making the rsa toolkit a kit for all types of encryption should facilitate easier indirect channel development. I feel that RSA should mature into better predictability by the september quarter I only owned 60% of my position because of these risks (Thank goodness), yet I was "kicking myself" every day as the stock went up because I thought the market "knew" the quarter was ok. Company claims RSA was ok and most shortfall was in the single sign on business. They claim customers are waiting for suite version of products to ship in june quarter and their were no competitive losses. I've been in the tech stock business for a long time - unfortunately, I've yet to hear a management say "Well our miss in the quarter was due to antiquated products, severe competitive and pricing pressure and sloppy management execution." So, are they telling the truth? If I were a customer, i'd probably wait for the suite product. In addition, I know the management team and know people that know them quite well - I trust them and I believe THEY BELIEVE what they are saying. (That doesn't mean that it's the truth - there may be problems that are hidden.) I don't know what to think yet, but i added a small slug of stock today - my gut is terrified, but my brain is telling me that this is a well positioned company for the long term. I'll be doing lots of work here in the next month (especially on the customer/partner side) I'll keep the thread "posted." Great, what a mess on a record day in the market! TD