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

To: Edward F. Horst Jr. who wrote (398)	4/14/1998 10:50:00 AM
From: Trader Dave	Read Replies (2) \| Respond to of 1614

Let me clarify: I'm frustrated as all get out, but I've been buying more recently. A few issues: Revenue miss was quite significant - supposed to do $44 million and only coming in at $39 million. RSA is still a "lumpy" business - consistent and predictable execution is still a few quarters off. I know some customers are waiting for integrated product suite to be released in june, but I also understand that the full suite won't be completed until Q4. My partner in crime, Bulldozer might have some comments on that. These are all short term issues. Longer term: token business could have a kick in the pants if large co's start using tokens for internal purposes, not just remote access. smart card is a longer term transition than the street realizes and although it might put pressure on client side pricing, provides upside to server pricing. RSA is still in its early stages and the encryption product line is transitioning from a single (hey we've got patents!) approach to licensing technology to a solution approach to integrating encryption into your applications. (Hey you want encryption, we've got it all - rsa, elliptical curve, yada yada yada.) Geeks buy technology, large companies buy solutions. (Welcome aboard Al Sisto) long term this thing's a screamer, but short term I'm frustrated - and we might be in for one to two more rough quarters. Let's see $23.6875 a share. roughly $11 a share in hard assets leaves $12.6875 a share in enterprise value or roughly $500 million for a $200 million revenue run rate. (Yes, it's a strong gorilla candidate) Cisco could take out sdti for $1.2 billion and still have the deal be accretive! However, I still have some "dry powder" there could be some additional near term frustrations. I can buy more if we see more pressure on the stock. A friend of mine noted that since the dead cat bounce died, some of the short term traders have been bailing out recently -- that's his fairly intelligent guess as to what's been going on. TD

To: Edward F. Horst Jr. who wrote (398)	4/14/1998 11:11:00 AM
From: Bill Shafer	Read Replies (1) \| Respond to of 1614

Let's see, $4/share in cash, $5/share in VRSN equity; at stock price of 23, you are paying $14 for SDTI. New Firstcall mean estimates are at 82 cents for FY 98, and $1.20 FY 99, that implies 41% growth for FY 98 and 46% for FY 99. A stock that can grow at 40+% should trade at a premium. Assume 50X earnings: .82 X 50= 41 share price FY 98; 1.20 X 50= 60 share price. How much more risk can there be at this stock price? The stock has found short-term support at 52 week low here, I am a buyer!

To: Edward F. Horst Jr. who wrote (398)	4/14/1998 1:26:00 PM
From: Analog Kid	Respond to of 1614

I was aware of SDTI's 25% stake in VRSN - do you happen to know how large their stake is in Finjan et. al? Thanks for pointing this out, I didn't know about these investments.