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

To: AlienTech who wrote (4591)	3/31/1999 10:39:00 AM
From: Raymond Clutts	Respond to of 6021

Once a high growth prospect is branded with the stigmata (pardon the allusion as we approach Good Friday) of failure (ie failure to meet market expectations of traders-not necessarily failure to meet expectations of LTB&H investors though) its pool of potential purchasers is significantly diminished or at least the nature of its potential purchasers' market perspective is dramatically altered. Now you no longer have the uncritical faith of new purchasers of the LTB&H philosophy as a pool of potential purchasers who will place a solid floor under share value. On at least a short term basis of 30-60 days you are instead confronted with purchasers of contrarian nature who are looking for a small rebound and then out again (ie dead cat bounce holders) who by the nature of their own frenzied selling after small advances practically guarantee that the reduced share value remains low as a self-fufilling prophesy. It is after all the perception of significantly increased earnings that brought it up and now it is the same perception of decreased earnings resulting from a restated R&D write-off that is bringing it down. The market may be wrong from a LTB&H perspective in that it has created an inefficiency that can be exploited (ie. if you believe that true growth prospects remain strong buy in after it hits bottom). Just don't expect that you'll see much good news for at least 60-90 days before that altered common perception begins to formulate. If I sound informed it's only through bitter personal experience. I did a pooling merger of my own privately held firm with a NASDAQ traded company 2 1/2 years ago & from a share price of 18 on merger it dropped to 7 less than 30 days after the merger. (Can you spell "securities litigation"?) It did recover ultimately but only after I sweated bullets to personally restore the company's earnings and then the NASDAQ traded shares I received were replaced with those of an NYSE acquirer. Total turnaround time was about 12 months before I could get my money out. These circumstances may be less dramatic but who knows? Good luck.