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Technology Stocks : Computer Associates -- Ignore unavailable to you. Want to Upgrade?

To: BostonView who wrote (2812)	7/31/1998 6:18:00 PM
From: rupert1	Read Replies (2) \| Respond to of 5232

BostonView: For those who don't already know, that memo to CA sales staff was posted on the Yahoo board a couple of days ago and some posters there validated it (if that is reliable validation!) Seriously, though folks, would someone like to summarise the hard news on CA since earnings, and summarise the opinion of informed analysts? There has been precious little as far as I am aware. This damage is extraordinary. Without any known cause for its continuance, one has to look to purely technical factors. The selling pressure is likely caused by the unexpected suddeness of the fall, and its extent on the first day after earnings. These two factors have meant that all the "weak hands" never had the gradual chances to sell that they expected would materialise after earnings, and they have now been joined in their rush by some of the "strong hands" forced by margin calls, internal disciplines of their funds, and concerns about a significant correction in the market or even a bear market. It is a convergence of forces - the spectacle of the stock sliding down so remorselessly scares off value buyers as well as all those liquidity buyers who are looking for relatively safe large caps. The fact that the volume on the downside has continued to be greater than normal for so long is also disturbing. It should have levelled off by now. Assuming there are no fundamental causes other than those explained by the company, then we have not yet seen a true technical bounce. That will come when a conviction grows among the potential purchasers that the downward spiral has stopped. There is probably some pent-up buying power waiting on the sidelines. If it hits suddenly it will squeeze the shorts. After a technical bounce of perhaps 4-6 points, it should then settle down a couple of points. Such a bounce could be started by a company announcement especially if it concerned a significant buy-back of shares. If there is to be such a buy-back it is probably wise of the company to wait until the panic selling has subsided so that any company buy-back actually encourages net buying by the public or catches an uptrend. It is difficult to believe that the men who built this company will not aggressively begin to restore some confidence in the stock, by talk of growing services capabilities and concomitant revenues, judicious accretive takeovers, earnings not as bad as feared and so on. The growth of CA has been a remarkable story and there is nothing in the information available to us to indicate that it cannot continue. I, for one. would appreciate some informed, reflective analysis on the thread based on numerical analysis of expected revenues and earnings linked to p/e ranges for this stock and the industry. Victor