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Technology Stocks : Check Point Software (CHKP) -- Ignore unavailable to you. Want to Upgrade?

To: Michael Gaudet who wrote (2227)	4/30/1998 7:08:00 PM
From: Maverick	Read Replies (2) \| Respond to of 7150

The hit to Check Point's stock price mirrors events in January, when Morgan Stanley Dean Witter downgraded the stock because Microsoft and Cisco Systems might enter the security market. More broadly, however, the stock market gyrations reflect worries about Internet security companies as other, bigger rivals enter the security niche. Already a wave of acquisitions is sweeping the industry. "You're seeing a roll-up of the industry--the name of the game is consolidation," said Nicole Schmidt, analyst with CIBC Oppenheimer. "It's not because their growth is slowing but because a lot of them are single product companies that don't have enough time to create critical mass. They have to worry about competition springing up soon--in a race to create critical mass or get bought out, there's a window of opportunity of 18 to 24 months." For its part, Check Point is trying to grow outside the security space, earlier this month buying Internet address firm MetaInfo. Rather than expanding into other parts of the security market, Check Point has designs on networking, the company has said. Microsoft does not currently have firewall software, but its proxy server software has some attributes of firewalls, which are used to protect computer network from outside intruders from the Internet. But Ballmer indicated, as investors and security experts have believed for some time, that Microsoft will add firewall features to the proxy software and perhaps build it into the 5.0 version of its Windows NT operating system. [CHKPF offers Firewall-1, SecuRemote on a wide variety of platforms inlcuding UNIX, NT, others. MSFT proxy server is nowhere near Firewall-1. With MSFT keeps delaying NT 5.0 till mid-99 and chances are even NT 5.0's security will fall short that of Firewall-1, we talk about CHKPF having a relatively safe 98 earnings. This scare resembles that in late 1/98. The stock should rebound to $40's as it did in Feb and March 98]

To: Michael Gaudet who wrote (2227)	4/30/1998 8:34:00 PM
From: Maverick	Respond to of 7150

MSFT's proxy server is not consider to be much of a threat to Check Point's firewall Microsoft has already introduced software, known as proxy server software, that includes some basic firewall features. But the product isn't considered to be much of a threat to Check Point's firewall products, which analysts said provide better management tools and security. A more serious competitor, according to analysts, is Cisco Systems, but even that networking giant hasn't made much of a dent in Check Point's business. Still, competitive rumblings from either company have in the past triggered fears amongst Check Point investors. "We've seen this draw before," said Paul Merenbloom, an analyst at Prudential Securities. "This is not an easy business to get into." Check Point's drop had many analysts scratching their heads. "Analysis has gone by the wayside and people react to rumor, innuendo and ghosts in the night," said Gibbs Moody, an analyst at UBS Securities. Excerpts from Dow Jones Online News, Friday, April 24, 1998 at 08:18