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

To: Charlie Smith who wrote (4361)	3/19/1999 8:24:00 AM
From: kendall harmon	Respond to of 6021

Here is Herb Greenberg's column from thestreet.com (please subscribe)this morning. He puts his finger on the same thing Chuzz mentioned, but I am not sure how much it advances the discussion. It reads a bit too much like "I told you so." Honey pot pitfalls: (They're blowing up left and right, Jerry, I tell ya they're blowing left and right.) Yet another company to join the growing list of the longtime favorites of short-sellers to take a hit is Network Associates (NETA:Nasdaq), the maker of virus-detecting software. The company, under scrutiny by the SEC, dropped 8 7/8, or 22%, yesterday to 32 1/4 after super bull John Powers of BancBoston Robertson Stephens downgraded the stock to a buy. This is the company, you may recall, whose CEO, Bill Larson, told analysts how he builds "little honey pots" and how his company creates "acorns" to help when sales are off. Well, maybe his honey pot ran out of acorns. Powers said revenues this quarter may miss his estimates. He also said he expects to see a "marked" increase in days outstanding of receivables. Why the rise in receivables? Neither Network Associates officials nor Powers could be reached. And one short-seller said there's really no good reason for a rise, unless the company had stuffed the distribution channel so full of merchandise that customers, who have already taken way more product than they can sell, are balking at paying. Whatever the case, this quarter's 10-Q should make interesting reading. Oh, but don't forget, Larson was quoted here as saying he doesn't read 10-Qs because they're written by lawyers and "if you read the 10-Qs, you would never buy a stock." In that case, it's beginning to look more and more like this is one company whose 10-Qs investors will have wished they had read.