Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Ali Shahbaz who wrote (5348)	6/2/1999 11:55:00 PM
From: Gary Korn	Respond to of 6021

Ali, NETA seems near a bottom. Maybe 1 or 2 more points lower. Who knows? That being the case, I would average down through the vehicle of naked puts. That is, sell July 12 1/2 puts for about 3/4 point. Or, sell July 15 puts for about 2 points. That way, if the stock closes below those strike prices on the 3rd Friday of July, it will be assigned to you, but your effective purchase price will either be 11 3/4 (for the July 12 1/2 puts) or 13 (for the July 15 puts). All in all, a decent way to add to your position at a discount. I had not had a position in NETA, but recently sold June 12 1/2 puts. If it gets assigned, I'll have bought it at 11ish. Gary Korn

To: Ali Shahbaz who wrote (5348)	6/3/1999 4:52:00 PM
From: Joanna Tsang	Read Replies (1) \| Respond to of 6021

Does any one have an idea where NETA is going? Is this coming up quarter going to be a good one or another nasty surprise? My Avg. cost is around $24.00. I don't know if I should take a wait and see approach or buy more shares and average down. Well, if I have the money to invest again, I would take a "wait and see approach" 'til well after the 2Q earnings is out. I heard from various sources here on SI, Yahoo, that this quarter will also not be a good one as well... At least the sentiments I've heard about a month ago seems to be tell me this...maybe things have changed? If Billy Boy is telling the truth and that this is an issue with Y2K, I don't see revenues coming in until well into the 4Q... Another thing I remember from experience with this stock is that typically the 2Q is the slowest quarter... Cheers, Joanna

To: Ali Shahbaz who wrote (5348)	6/4/1999 8:34:00 AM
From: Edwarda	Respond to of 6021

Ali, just for a quick recap, when the company announced the first quarter results in April, Larson said that demand had pretty much dried up. The reasons cited were Y2K concerns, which were lowering ASPs because of smaller pilots rather enterprise-wide rollouts; an aggressive new product introduction ahead, which was causing customers to "wait and see"; and the dramatic increases in deal size, which tend to have longer selling cycles. To clean out the channel, the company was completely halting sales to its distributors as a one-time adjustment. It looks to me as though the company had been stuffing the channel and was carrying about 140 days of inventory rather than its stated target of 90 days, which is still too high. So it looks as though the only revenue the company will be recognizing is consulting and training, around $25 million, and the company will be burning cash. Look for a loss of over a dollar in earnings per share this quarter and a loss for the year as a whole as the recovery is likely to be slow. The bit of good news for next year is that the company has been moving more of its business to term-based licenses that come up for renewal every two years. These renewals have a lower cost of sales than new licenses and should help the earnings recovery. Hope this helps.