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

To: Elephant who wrote (4047)	1/21/1999 8:33:00 AM
From: Charlie Smith	Respond to of 6021

Elephant: What does change is that if the SEC succeeds in recategorizing the charges, NETA will have to account for the charges for the next several years, resulting in a reduction in reported earnings (not in actual earnings or in cash or in revenues) of about $0.12 per year, or about 5% in 1999, 4% in 2000, and even less in future years. This is all that changes! And all the so-called "momentum" investors head for the hills, which is what has happened the last two weeks. Charlie

To: Elephant who wrote (4047)	1/21/1999 11:06:00 AM
From: AlienTech	Read Replies (1) \| Respond to of 6021

What happened? Shorts dont want to use their ole buddies anymore? Seems they got a new one. Cant belive they made a press release on this. But it is strange to see anything like this from computer reseller news. It is not product reviews or techonology news. Maybe Amy's BF gave her some ideas on how to make money on the side. SEC Scrutinizes Network Associates Accounting, Reports Computer Reseller News MANHASSET, N.Y.--(BUSINESS WIRE)--Jan. 21, 1999--The accounting practices of Network Associates Inc. (Nasdaq: NETA) related to its numerous acquisitions are being scrutinized by the U.S. Securities & Exchange Commission, according to exclusive reporting by CMP Media's Computer Reseller News, the most respected channel newspaper in the technology industry. Financial-community and industry sources told the technology newspaper that the SEC is looking into NAI's practice of writing off expenses related to acquisitions as so-called "in-process research & development" charges. A Network Associates spokesman said that "hundreds of companies" had received a similar letter from the watchdog commission and several other vendors admitted their accounting is being scrutinized by the Commission. NAI's roster of acquisitions -- including such vendors as Pretty Good Privacy, Trusted Information Systems, Magic Solutions, Dr. Solomon's Software and Network General -- may have raised some eyebrows at the SEC, sources said. A Network Associates spokesman also denied recent rumors that the company's Chief Financial Officer Prabhat Goyal was resigning. "He is definitely not leaving the company," the spokesman said. The reporting, by Senior Editor Amy Rogers, is posted on the Computer Reseller News Web site, crn.com. Published by CMP Media Inc., Computer Reseller News has a circulation of more than 115,000 and reaches readers with the product trends and industry news needed to sell comprehensive technology solutions. With an editorial team of more than 70 journalists, CRN provides the broadest, most in-depth coverage of any publication in the technology channel. CMP Media Inc. (Nasdaq: CMPX) is the leading high-tech media company providing essential information and marketing services to the entire technology spectrum--the builders, sellers and users of technology worldwide. With its portfolio of newspapers, magazines, custom publishing, Internet products, research, consulting and conferences, CMP is uniquely positioned to offer marketers comprehensive, integrated solutions tailored to meet their individual needs. Online editions of the company's print publications, along with products and services created exclusively for the Internet, can be found on CMPnet at cmpnet.com. NSTL, the company's independent testing lab and consulting organization, serves government, corporate and technology vendor clients around the world. CONTACT: Barry J. Zusman (516) 562-7040 bzusman@cmp.com or Steve Rubel (516) 562-7434 srubel@cmp.com 10:40 EST JANUARY 21, 1999

To: Elephant who wrote (4047)	1/21/1999 12:49:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 6021

Elephant, there must be a delayed echo here! I made those identical remarks about a week or so ago. [Just kidding -- the more investors read and understand these concepts, the better]. It seems to me that the real question that needs to be addressed is how to adequately account for R&D. I see nothing wrong with having the expenditure capitalized and amortized over a three year period. And I would like to see the practice of in-process R&D write-offs discontinued entirely. It seems to me that the only rationale for having an R&D project written off is if it is abandoned and deemed unmarketable to another development company. These kinds of changes are for accounting purposes only. They have no bearing on cash flow or income taxes. I think that it is important that "earnings" reflect something about the ability of the business to generate economic profit. Right now, I'm not at all sure what "earnings" means, especially when a company has engaged in as many acquisitions as has NETA. TTFN, CTC