| To: AlienTech who wrote (5982) | 8/1/2001 2:57:58 PM | | From: Ron | | | | Code Red expected to affect Internet gradually
WASHINGTON/SAN FRANCISCO)
By Elinor Mills Abreu
SAN FRANCISCO, July 31 (Reuters) - Security experts on
Tuesday saw no immediate effect on the Internet from the
dreaded "Code Red" worm that was expected to have begun winding
its way through Web servers in a renewed attack.
But experts also cautioned that more time was needed to
assess the impact of the worm's forecast outbreak, which had
been expected to start as global clocks ticked over to midnight.
--
ECONOMIC IMPACT
Computer security vendor Network Associates Inc. <NETA.O>
on Tuesday reported that it had scanned more than 20,000
systems and detected more than 1,230 servers that remained
vulnerable to Code Red shortly before thekey deadline for a
renewed outbreak.
Even as network security experts tracked the progress of
the bug, one research organization attempted an initial tally
of its economic costs.
Computer Economics, based in Carlsbad, California,
estimated that Code Red has already cost an estimated $1.2
billion in damage to networks, ranking it below last year's
Love Bug virus ($8.7 billion) but above the Melissa virus of
1999 ($1 billion) in terms of destructiveness.
The cost of clean-up, monitoring and checking systems for
the Code Red, which has infected about 360,000 servers, was
near $740 million, said Michael Erbschloe, vice president of
research at Computer Economics.
The loss of productivity associated with the worm was near
$450 million, he said.
"Information technology people are not cheap," he said. "A
lot of companies have outsourced this and they have to pay
sometimes $300 an hour to have people come in and look at their
servers." |
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| To: Brian Slaybaugh who wrote (5978) | 8/2/2001 8:41:17 AM | | From: Ron | | | | Seems like extensive press coverage of Code Red would boost stocks like NETA:
sei.cmu.edu
Code Red' Slams Thousands Of Sites
Bug Targets Web Servers
WASHINGTON, 4:33 p.m. EDT August 1, 2001 -- The "Code Red"
computer worm had infected about 80,000 Web sites as of 2:30 p.m.
ET -- prompting warnings that it could worm its way into a quarter of a
million of them within a day.
But there are also some encouraging signs. The
infection rates are slowing down with every
passing hour. And that's causing officials to be
more optimistic that they spread the word on
time, and that the final numbers won't be quite so
high. They've been calling on Web site operators
to install a software patch available from
Microsoft. When the worm -- which is like a virus
-- struck last month, it had only a day to spread
itself, before it turned to its next task of
targeting the White House Web site. This time,
it's expected to spend 20 days trying to spread.
There are fears that there could be a slowdown
across the Internet by the end of the day. But
officials are still hopeful that enough computers
have been inoculated to prevent major
interruptions. The head of research at a computer
security think-tank says the rate of infection
seems to be about what it was when the "worm"
first appeared last month. The worm, which is like
a virus, first appeared on July 19. It had just a
day to spread, before it went into attack mode
against the White House Web site. This time, it
has had the first 20 days of the month to spread.
The FBI says it's been spotted worldwide. It
doesn't target home computers -- just Web site
operators. But that can lead to slowdowns for all
Internet users. Early indications had been that
the worm hadn't turned into the Internet menace
it was feared to be. Then around 10 a.m. ET, CNN
reported that the FBI issued a warning that the
worm was starting to slow Internet traffic in
limited instances. The virus-busting CERT
Coordination Center reported at 8:30 a.m. ET that
the worm had gone active, as per predictions.
CERT "has seen evidence of exploitation and
scanning, and our staff members are currently
analyzing this activity. Early reports of activity
spanning the entire globe, including the United
States, indicate that the worm is presently
spreading throughout the Internet," the center
stated on its Web site. "As was the case in July
with its early progression, the worm's potential is
still unknown at this time." For updates from
CERT, click here After the warnings, many site
operators installed a software patch to ward off
the worm that was expected to re-emerge last
night. However, by early this morning there were
no indications that the worm was having any
major effect on the operation of the Internet.
Code Red infected several hundred thousand
computers during its first outbreak July 19. |
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| To: Tim Robbins who started this subject | 8/8/2001 11:05:53 AM | | From: AlienTech | | | | Network Associates, Inc. (Nasdaq: NETA), announced today that it intends to offer, subject to market and other conditions, up to $300 million aggregate principal amount of Convertible Subordinated Notes due 2006 (excluding up to
an additional $45 million that may be issued upon the exercise of an option granted to the initial purchaser). The offering will be made only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933.
This news release does not constitute an offer to sell or a solicitation
to buy any of these securities. Any offers of the securities will be made
only by means of a private offering memorandum. The securities to be offered
will not be registered under the Securities Act of 1933, as amended, or
applicable state securities laws, and may not be offered or sold in the United
States absent registration under the Securities Act and applicable state
securities laws or available exemptions from such registration requirements. |
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| To: Tim Robbins who started this subject | 8/8/2001 4:28:18 PM | | From: AlienTech | | | | Anyone remember the last bonds they issued for like 500 mil? Conversion price was like $48.. The stock was at the time like $45 or so. They do this because of the shorting provision and they want to make sure if you do short against the box you loose some of the profits.. Anyway the stocks never seen that price again and never will! But looking at the short position they have either covered already or its unreported short.
>>
(So, the goal here is to get short the common stock and then knock it down to profit from that short position. You don't have much fear of a squeeze up because the worst that happens is that your bond is converted into common stock and you are protected. It is a great deal for the bad guy! You profit from the short. You get protected from the squeeze, risk free, because of the conversion provision. You get income on the short stock, known as rebate income. That's the interest on the credit balance generated by the short. You get the coupon from the bond. And the worst that happens is that the company's stock plummets and it runs out of capital and you get 100% of the money you made when you shorted it, plus the interest that you picked up and you get wiped out on the bond. Big deal! You don't care. You have shorted $100 million worth of common stock. The same amount you gave to the company on the bond!!! It is a push plus huge interest return.)
thestreet.com |
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| To: AlienTech who wrote (5986) | 8/17/2001 12:50:23 PM | | From: deeno | | | | Dont know why I still have some of this
at least these guys didnt do the convert offering
Sniffer: A Closer Look at the
Business Unit
STRONG BUY–V
Price (August 16, 2001): $14.85
Price Target: $19
52-Week Range: $27 - 3.25
• Sniffer Product Line is a Key Driver
Sniffer products make up roughly 24% of total consolidated
revenues and the company has a leadership position.
• A leader with best-in-class network management products
We estimate that this business should show significant growth,
driven by strong results from the Distributed Sniffer solutions as
the mix shifts away from the portable product line.
• Dominant market share with competitors stumbling
With nearly 20% market share Sniffer continues to execute well,
even as some rivals struggle to regain their footing.
• Reiterate our Strong Buy
We believe the stock remains undervalued trading at 22 times
our 2003 earnings estimate.
Page 1
FY ending Dec 31: 2000A 2001E 2002E 2003E
EPS ($) (0.16) (0.11) 0.40 0.68
CEPS ($) (0.16) (0.11) 0.40 0.68
P/E (92.8) (135.0) 37.1 21.8
P/CE (92.8) (135.0) 37.1 21.8
Price/Book 4.1 – – –
EV/EBITDA (57.8) – – –
Yield (%) – – – –
Market Cap ($ m) 2,033
Enterprise Value ($ m) 2,123.8
Debt/Cap (06/01) (%) –
Return on Equity (06/01) (%) –
L-T EPS Grth ('01 - '05) (%) 20.0
P/E to Growth (6.75)
Shares Outstanding (m) 136.9
Q'trly 2000A 2001E 2002E
EPS actual curr prior curr prior
Q1 0.20 (0.17)A – NA –
Q2 0.24 (0.02)A – NA –
Q3 0.27 0.01E – NA –
Q4 (0.87) 0.07E – NA –
Price: Abs. and Rel. To Market & Industry
: NETA NASDAQ: NETA
MORGAN STANLEY DEAN WITTER Comment
Company Update
Please refer to important disclosures at the end of this report.
Network Associates - August 17, 2001
Page 2 MORGAN STANLEY DEAN WITTER
Please refer to important disclosures at the end of this report.
Sniffer: A Closer Look at the Business Unit
Summary and Investment Conclusion
We recently spoke to different contacts at the company to
gain greater visibility into the Sniffer product line. The
Sniffer business made up roughly 24% of consolidated
revenues last quarter and we believe it is a key growth
business going forward. We believe this business unit
continues to see stable demand relative to expectations and
should continue to enhance the momentum of the company
overall.
Sniffer: 15 Years of Product Leadership
The Sniffer business unit of Network Associates designs,
manufactures, markets and supports software-based analysis
and monitoring solutions for managing computer networks.
Sniffer products and services help maximize network
productivity and minimize downtime. Sniffer has been
shipping product for 15 years and more than 200,000
Sniffers have been sold to date. The Sniffer business unit
became a part of Network Associates in 1997 with the
acquisition of Network General for $1.1 billion in stock.
The Sniffer product line consists of both portable tools and
distributed systems, and employs proprietary technology to
link advanced protocol support with expert analysis
capabilities to provide real-time identification, diagnosis
and resolution of network problems. Sniffer’s
manufacturing operations consist primarily of final
assembly, testing and quality control of materials,
components, subassemblies and systems. The business unit
also provides product support, education, and network
consulting services.
Portable Sniffers are fault isolation and management tools
that consist of software and a choice of network interface
cards that run on a variety of portable and notebook
personal computers. With support for a variety of network
vendors, protocols, and topologies, Portable Sniffers can
adapt to the specific analysis needs of customers as their
network configurations change. Portable Sniffers began
shipping in 1986, and currently make up roughly 50% of the
business unit’s product revenue, down from 80% five years
ago.
Distributed Sniffer is a network availability and
application management system designed for monitoring
and troubleshooting distributed enterprise networks.
Distributed Sniffer solutions are composed of distributed
intelligent servers and centralized console software. When
installed on distributed segments, Sniffer servers analyze,
process and consolidate information from individual
network segments and communicate through the network to
one or more central consoles, which collect and display the
information. The systems are centrally administered for
remote management, such that a Distributed Sniffer in New
York could be managed from California.
With best in class technology and leading market share, the
Sniffer business unit represents an important part of the
Network Associates story. As the product emphasis shifts
away from low-growth Portable Sniffer to higher growth
Distributed Sniffer, we estimate that this segment should
show significant growth for the next few years.
Market and Customers
Sniffer’s largest customer group is made up of network
management personnel with responsibility for supporting
the operation of enterprise networks. Sniffer products are
designed to enable network managers to function more
effectively by minimizing network downtime though speedy
identification and resolution of problems, reducing
operating costs through centralized management, and
identifying problems before they occur. In particular,
Portable Sniffers are marketed to field service engineers for
use in the maintenance and repair of networks, while
Distributed Sniffer sales are more focused on the enterprise.
The company also markets to systems integrators and field
service organizations that specify, implement, and service
data networks for customers or service the equipment and
software which they have supplied. In both cases, network
fault and performance systems are useful in identifying and
resolving the cause of network problems. Benefits to these
organizations include increased customer satisfaction and
reduced service expense from rapid problem resolution.
Sniffer products also allow relatively less skilled field
service personnel to capture customer problems at the
source for remote analysis, reducing the need for more
experienced personnel to travel or to replicate problems.
IDC estimates that this segment will account for 44% of the
total market or $472 million in revenue in 2001, with a
compound growth rate of 14% annually through 2005.
Network Associates - August 17, 2001
Page 3 MORGAN STANLEY DEAN WITTER
Please refer to important disclosures at the end of this report.
Distribution
Sniffer sells its products and services to domestic end users
principally through its direct sales force, numbering 100
quota bearing sales reps. The business unit also maintains
an indirect distribution channel using authorized resellers
and systems integrators. Internationally, Sniffer is more
reliant on channel partners including distributors, systems
integrators and authorized resellers. The business unit also
sells its products and services through its direct sales force
in several countries totaling 50-60 representatives. The
company’s leading market is financial services, which
includes brokerage, banking, and insurance.
Competition
As recently as three years ago there were as many as five
major vendors of remote monitoring (RMON) probes such
as Sniffer Portable, but as growth in this segment has
slowed the field has winnowed to include competitors such
as Agilent (A, $28, Strong Buy-V) and NetScout (NTCT,
$5, Not Rated). However, the recent termination of
NetScout’s private label OEM relationship with Cisco,
which accounted for roughly half of NetScout’s revenue in
the last five years, is a clear setback for this rival. Exhibit 1
below outlines the relative market share of the top five
vendors the network traffic management space.
Exhibit 1
Network Traffic Management Market Share
Company/Ticker 2000 Revenue ($MM) Market Share
Network Associates 201 19.8%
Agilent 194 19.1%
Acterna 104 10.2%
NetScout 83 8.2%
Fluke Networks 72 7.1%
Source: IDC
In addition, there are no off the shelf products that
incorporate network management and it is costly for
customers to customize their own hardware, limiting the
availability of close substitutes for this equipment.
Key differentiators for the Sniffer product line include
support for new technologies including 802.11b, wireless
LAN, VoIP, and mobile wireless. Sniffer supports more
than 450 different protocols, a level unsurpassed by other
vendors. Sniffer also offers a consistent user interface
across all of its products.
Another important advantage is Sniffer’s Expert Analysis
software that incorporates artificial intelligence technology.
Expert Analysis learns network configurations as it captures
network data, automating the identification and diagnosis of
network problems in real-time. By doing so, the product
can diagnose problems within 5-10 minutes rather than
hours required by some competing products.
Interaction With Systems Management
To facilitate centralized network monitoring and optimize
customers’ hardware investments, Distributed Sniffer
solutions are integrated with leading network management
system platforms including Tivoli, CA, and Micromuse.
These vendors tend to be “managers of managers” in that
they report problems but do not drill down into why
problems are happening. Sniffer addresses the fundamental
problem of why problems are happening and allows the
engineer to pinpoint and address the issue. A Distributed
Sniffer system provides alarms and other information to
network management consoles, which integrate analysis of
the data with other network management functions.
Service Business
Sniffer’s services group provides educational, consulting
and product support services to increase the productivity of
network managers and to solve problems where expertise
may be scarce. These services assist customers in
deploying Sniffer products throughout their networks, in
integrating products with other network management
systems, and in performing fault and performance analysis.
Consulting services provide both proactive and reactive
network services to customers, and education services for
its products are conducted in dozens of major cities
worldwide as well as at customer facilities.
Domestically the business unit supports its products
directly, and employs a combination of direct support and
the assistance of distributors internationally. Sniffer
products are typically sold with a support agreement of up
to one year included in the price, with support services
beyond the initial period available for a fixed fee. Support
agreements generally include software updates, technical
support, and repair coverage on all hardware components.
Financials
Network Associates does not break out operating results by
segment, and particularly in light of the changes to the
revenue model it is difficult to gauge with accuracy the
results of any particular segment. However, to gain sense of
the potential for the business, we examined the results of
Network General for the three full fiscal years prior to its
acquisition.
During this period total revenue was split roughly 80%
license and 20% service, with an average of 24% coming
Network Associates - August 17, 2001
Page 4 MORGAN STANLEY DEAN WITTER
Please refer to important disclosures at the end of this report.
from international operations. For this time gross margins
ranged between 74% and 77% with an average of 76%,
while operating margins ranged between 16% and 22% with
an average of 19%. At the end of fiscal year 1997, Network
General reported total revenue of $241 million and earnings
of 55 cents per share.
We estimate that total product revenue from the Sniffer
business unit totaled $137.2 million in 1999 and $167.7
million in 2000, figures which do not include service
revenue. Our forecast calls for 3% product revenue growth
in 2001 to $172.1 million, a somewhat depressed number
that reflects the transition on January 1 from a sell-in to a
sell-through revenue recognition model.
Recent Developments and Outlook
In the most recent quarter Sniffer launched Sniffer Voice, a
network management solution for managing voice over IP
networks. Distributed Sniffer received recognition from
Network Computing magazine as the top network protocol
analyzer, and was recognized by strategic consultant Frost
& Sullivan with its 2001 Market Engineering Leadership
Award for the product’s dominant market share in
LAN/WAN management. In this space the company
reported replacing NetScout in at least three accounts,
including six figure deals at Amgen and EarthLink.
We believe the majority of growth for Sniffer will come
from the distributed product line, for which we forecast
annual growth of 20-30%. We believe growth in the
domestic market is between 10-12% annually, driven
primarily by adding additional protocol decoders and
system functionality. In the international market there are
significant growth opportunities in the academic and
research markets. The company is focused on improving its
execution internationally, and sees opportunity to gain
market share in all areas. Future directions for the product
line include expansion beyond the traditional network with
products that monitor and analyze enterprise applications.
While we recognize that demand for the overall IT sector
has softened over the past several quarter, we believe the
Sniffer product line has been hitting its targets the past
couple of quarters. In addition, we believe demand has
been stable although we will be watching for any signs of
weakness given the challenging economic and IT
environment. Spending on these solutions has held up
partly due to the fact that while customers used to throw
more bandwidth at network related problems, now they are
being forced to be more efficient with existing infrastructure
which is driving demand for products like Sniffer.
Network Ass |
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| To: deeno who wrote (5988) | 8/17/2001 1:49:22 PM | | From: AlienTech | | | | These guys cant even see 3 months ahead, let alone 2 years ahead..
>>We believe the stock remains undervalued trading at 22 times our 2003 earnings estimate.<<
You know, they can come lick my <insert word>. Year 2003?? They sure do have BALLS the size of the fat guys to be able to predict something not ONE year out, but TWO!.. Maybe they also give out free memberships to the psychics network. |
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| To: deeno who wrote (5988) | 8/17/2001 1:50:36 PM | | From: AlienTech | | | | These guys cant even see 3 months ahead, let alone 2 years ahead..
>>We believe the stock remains undervalued trading at 22 times our 2003 earnings estimate.<<
You know, they can come lick my <insert word>. Year 2003?? They sure do have BALLS the size of the fat guys to be able to predict something not ONE year out, but TWO!.. Maybe they also give out free memberships to the psychics network.
While they are at it maybe they should mention its trading at quite a few numbers of the current years multiples. And think I know a few things MSDW stands for. |
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| To: AlienTech who wrote (5990) | 8/17/2001 2:49:23 PM | | From: deeno | | | | | so do you still hold some of this stuff? I cant sell it all cause I like the security industry. I would find it interesting if indeed they really did have products worth buying. Certainly in the old days on this thread most software engineers seemed to sneer at their offerings compared to "best of breed" software. Might they really have put together a reasonable product line? |
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| To: deeno who wrote (5991) | 8/17/2001 7:57:03 PM | | From: AlienTech | | | | Sure wish I knew. I got out here and am just thank full I got some money out. For a while there I thought it woudnt even be worth the paper. But with so many companies in the dumper, unless you have a big tax gain, why bother? Even CIEN is almost the same price. If I was going to take a risk here I would go for TLAB, CIEN, JNPR or one of the others showing promise when the market returns rather than hoping this can turn around. Its not market damage, its internal, much harder to fix that.
Oh the june 2001 issue of digit had an review of 18 antivirus programs. Considering they had it on the CD, they still gave a pretty bad review. The thing crashed on compressed files as before. And a B+ because it was easy to use and had good reporting. Only escan?? and quickheal?? came lower. Even the percent detected was like 91%. For the personal security stuff they gave rave reviews on free software and again personal firewall and pgp security came out looking pretty bad. Good to see some real comparisions from places that have no direct contact with the vendors for souped up reviews, they got a B and only neowatch?? and tiny firewall got lower scores. |
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