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WatchGuard Technologies (WGRD) Message Board

  • hammerandtong2001 hammerandtong2001 Jan 21, 2002 12:10 PM Flag

    Bullish on WGRD...

    ...not me.

    Just trying to offer a hypothetical on why some longs remain unabashed bulls here. WGRD, weakened and bruised, is heading into some heavy weather:

    1. Tech behmoths INTC, IBM, MSFT all coming up short during reporting season;

    2. FireboxIII, will either turn it all around, or crush what's left;

    2. NASD has logged 3 big distribution days in the past 2 weeks of trading -- usually enough to kill a bull move. Note the accelerating volume on down days.

    That notwithstanding, the coming week should be green enough to hold out the offer of "hope" to those that seek it. WGRD may float up here a bit, but seems range-bound on the run-up to the CC.

    Company-specific action can -- and does -- defeat trends and market movements all the time. It could very well be that Slatt saw what I see too, and that's why he accepted a move out of the CEO slot: the need to explore strategic alternatives. Unfortunately, there has been no positive indicator suggesting that the company will pursue a share-value enhancing strategy...in fact, the exact opposite has been the order of the day at WGRD.

    WGRD's trading level, business, and financial condition conspire in ways that offer unattractive valuations for potential suitors. What is this business really worth? Attach a generous 6X sales to $50MM and you end up with $11-$12/per. WGRD was trading at this level just a few weeks ago; if you were CHMN BOD, would now be the time? Can you dress up the merchandise...after all, this thing loses better than $5MM/Q.

    What gets said and who says it during the upcoming CC is impt to WGRD now; we have reached the Rubicon and it is time to act. Of course, "doing nothing" is a proactive decision, too...and one that WGRD might be perfectly willing to take given "your" cash sitting in the bank.

    Still very bearish on WGRD now, but going into this critical CC with only a very light position.

    Luv, Hammer

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