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

To: John Parillo who wrote (5215)	4/30/1999 12:40:00 PM
From: William Presti	Read Replies (2) \| Respond to of 6021

Hold on lemme check my crystal ball. ... Yes, this stock will be back to the 40-50 range in a year. ;)

To: John Parillo who wrote (5215)	4/30/1999 12:41:00 PM
From: Just_Observing	Respond to of 6021

"Will this stock recover to 40-50 by next year? " Here is one way to evaluate what the market thinks that the stock price is going to be in the next year or so. Let's look at the Leaps which are the longest out into the future. These are the Jan 2001 leaps. The Jan 2001 15 call is going for $5 to $6 (say $5.5). We will utilize this number to guess where the market estimates that the stock will be on options-expiration on Jan 2001. Let's assume the market is efficient. If you do the math (options valuation models such as Black-Scholes or Binomial), you'll find that the probability is 95% that the stock will be below $26 by options expiration on jan 2001. It also says that there is a 90% chance that it is below $23. So that's your answer. The market is saying that there is a 95% chance that the stock will be below $26 by Jan 2001. Or 90% chance that it's below $23. Or a 50% chance that it's below its current price of $13.5. I can send you the details if you wish. Please keep in mind that one piece of good news can change the entire picture. But at this time, the outlook for NETA is bleak. And the options market reflects that picture.