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Technology Stocks : Network Associates (NET) -- Ignore unavailable to you. Want to Upgrade?

To: SHUBLU who wrote (3030)	8/7/1998 2:43:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 6021

How would I rate the NETG acquisition? Much too expensive. NETA has had excellent earnings over the past year or so, but the price of the stock hasn't gone to new highs. The reason is that the company keeps making acquisitions that are dilutive, both in terms of eps and in terms of their growth rate. I believe that NETA will emerge as the dominant player in the network security field. The acquisitions were all based on either adding needed technologies (as in the NETA acquisition) or adding market share (as in the SOLLY acquisition). I believe that we will eventually see shareholders of this company amply rewarded in the future. But, the volatility within this stock is much more than simple amplification of market moves due to its high beta. As I indicated before, I have mixed emotions about Bill Larson. He has a vision and he pursues it with single minded devotion. That is both his strength and his weakness. He apparently does not place much value on human capital, and that is a major driver in technology. On the other hand, he has put together a formidable company. The reason for the low P/E is the ongoing legal battles together with Larson's appetite for expensive acquisitions. The market has properly discounted those negatives, and is waiting for evidence that these additions will be properly digested. I suggest you ask Alien and Joanna about their assessment of management within the company. TTFN, CTC