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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (6427)	6/13/1998 6:26:00 PM
From: rupert1	Read Replies (1) \| Respond to of 6980

Bosco: Big difference between CPQ and BAY is that CPQ has made a statement that allows it to come in slightly below expectations without upsetting the apple cart; if it comes in slightly above (which is also within the definition "about breakeven") then it will probably be rewarded. In BAY' case, it persistently gave off very optimistic messages through no lesser person that House, then suddenly ramped down the expectations one month before earning (and only a couple of weeks after those House optimistic statements), then ramped down again two weeks before earnings and still misssed the reduced expectations by a significant margin. Ironically, this poor performance qualified BAY as a take-over candidate thereby preventing the share price from finding a sub-20 level. I would ask you to remember the reasons BAY gave then was that most of the sales took place in the last week of the quarter and there was slippages of significant sales of Accelar from that quarter into this "I wish I had another two weeks" said House. But now they are saying something similar. One of the VPs has said that there are 2,000 Accelar out there most of which are in trials - and Investor Relations is saying that while they expect performance to meet expectations they dont know because this quarter too is back-end loaded. Of course, we should expect that things are better but a company which loses credibility, as Bay did last quarter, cannot expect to enjoy credibility again until it proves itself. I know you think I was too optimistic last quarter - but I dont think it is a case of optimism - read again the informaiton put out by the company, the House meeting with analysts in New York, and the informationn fed to analysts. My complaint then was against those who were saying that the sudden reversal in the stock price after it spiked to 35 and the very heavy selling must have been the result of bad news known to insiders and leaked to others. I could not believe that the company would have misled investors in this way and could not believe that the sellers had hard information. Well I think the company did mislead - through ineptitude rather than through deliberate intention - and I now concede that perhaps the bad news was made known to those in the market who were the heavy sellers from 35 down to about 26, where it was when earnings were announced. By the way, in addition to CPQ I recommended CA. Since I mentioned it, it has already made a significant move from about 51 to 56 but I think it has more to go perhaps to 60-62 when the tech recovery comes - perhaps this week. For such a large stock it does tend to be volatile. Best wishes. Victor