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

To: Chuzzlewit who wrote (4660)	4/6/1999 10:43:00 AM
From: Just_Observing	Read Replies (3) \| Respond to of 6021

I think Larson is making a huge mistake by not preannouncing (assuming there's a shortfall in revenues or earnings). He's been accustomed to giving out good news for 20 or 30 quarters. So doling out bad news may be very hard for him. Even at the Robertson Stephens conference around Feb 23rd, he was projecting a good quarter and a good year. At that time NETA did not tell investors that its quarterly revenues ran 25:25:50 i.e., 50% coming in the last month of the quarter (this news came later). Now, if there is a significant shortfall from the expected numbers of 285 to 287 million, there will be a flurry of lawsuits by enraged shareholders. Keep in mind that NETA has fallen from a high of 67 5/8 to around 28 - a drop of nearly 40 points. With 135 million shares outstanding, that works out to be 5.4 billion dollars or $20 per person in the US (current population of the US being 270 million). That's a tremendous amount of dollars and some shareholders will seek retribution in the courts. Bill Larson's bravado, which worked to his advantage when the stock climbed, has now become his biggest liability. BTW, there is high put activity in NETA today continuing the trend from yesterday. Maybe some are viewing the flurry of PR announcements by NETA as a smokescreen.

To: Chuzzlewit who wrote (4660)	4/6/1999 10:44:00 AM
From: AlienTech	Read Replies (1) \| Respond to of 6021

>>Just a bit of naive arithmetic (I'm too tired to really think). Suppose, for example, that NETA comes in a bit light this quarter -- say $.45. Let's also suppose that it can grow it's profits at 20% pa. That means that NETA is currently selling at less than 15x the next four quarters' earnings using $.45 as a base (.47 + .49 + .52 +.54 = $2.02). By comparison, the S&P is selling at roughly 27 times next year's earnings which are expected to grow at around 9%. Life can be very confusing at times.<< You can say that again. I guess you only need companies like MSFT and some of the internets. Watching CIEN, BMCS etc hit the dumps. At leasy CHKP is looking a tad more decent today but only cause its getting hyped.