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Network Associates’ Stock Plunges Amidst Earnings Concerns

Following its warning late Tuesday that it expects to lose somewhere between $130 and $140 million in the fourth quarter of 2000, Network Associates Inc. saw its stock plunge in early morning trading on Wednesday. During the morning session, shares of the anti-virus software maker dropped nearly 70 percent to $3 ¾, resulting in a loss of almost $8 per share.

Following the close of the market on Tuesday, Network Associates became the latest in a long line of technology companies to warn of lower revenue earnings. The Santa Clara, Calif.-based company blamed the shortfall on the overall economic slowdown, not its own business. It also said key distributors cut inventory levels because of concerns over a broader economic slowdown.

While making the announcement, Network Associates also revealed major changes are in the works, as its CEO, COO, and CFO are all stepping down. A new CEO is expected to be named in 30 days.

Overall, Network Associates expects revenues of $55 to $65 million for the fourth quarter of 2000. As a point of reference, Network Associates posted revenues of $218.1 million in the year-earlier period. – Jim Martin

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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