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

To: AlienTech who wrote (4933)	4/13/1999 9:55:00 PM
From: AlienTech	Respond to of 6021

LEGALIZED MARKET MANIPULATION? This isn't securities analysis, it's legalized market manipulation, pure and simple. And though it is bound to blow up eventually, for now it is working dramatically. In the week since these two analysts released their reports, MGC Communications has soared from $11.50 to $47 per share, suggesting that the price could easily reach the Furman Selz man's $90 target by the end of this week. After all, at its current price of $47, all the stock has to do is double. But anyone who thinks such run-ups will endure forever need only look at Compaq. When Compaq acquired desperately troubled Digital Equipment Corp. for $9.6 billion in stock and cash back in January of 1998, Compaq's chief executive, Pfeiffer, said the acquisition “would be accretive within a year.” That's Wall Street-speak for predicting it would make earnings per share rise. But I warned, in this space, that Compaq was paying far too much for Digital and that Compaq's own performance would suffer in the process. On Wall Street as anywhere else, you are what you eat — meaning that it is only a matter of time before acquiring companies begin to take on the characteristics of the companies they devour. That process has now begun to take its toll on Compaq, which has undergone two successive and steep drops in price, falling from a high of more than $50 per share in late January to a Monday closing price of $24. Wall Street analysts could have easily foreseen this all coming, but chose instead not to look. Now their clients have been left holding the bag. msnbc.com