Short sellers posting anonymous messages to stock market discussion boards on the web have claimed a third corporate victim in as many months. Network Associates Inc CEO Bill Larson has had to hold a conference call to assuage investor fears after rumors of NAI’s imminent demise swept the net. The company’s shares are trading in the low 30s from a 52-week high near $60 in July. Short sellers make their money when stocks go down. The latest rash of scandals has seen anonymous messages incite panic selling among stockholders for AgriBioTech and Philips Services Corp as well as NAI, sending prices down and making tidy profits for the shorts suspected of having posted those very messages in the first place. Some shortsighted shorts, after never talking to management, decided to make inappropriate and scandalous comments about Network Associates, Larson told media and analysts on Thursday afternoon. I think it’s pure poppycock that someone can get into a public forum and make these sorts of comments about the company, he added. Not that I mind taking the time to talk to all of you, but it is not the most effective use of my time. An August 5 poster to Yahoo! Finance, identified only as pieces_of_EIGHT, captures the flavor of the ugly rumors surfacing about NAI: Best short I ever had, he writes, this company is a house of cards and is going nowhere. The criticisms focus on NAI’s origins in the merger of McAfee and Network General last December, and on the many acquisitions – notably of Pretty Good Privacy, Trusted Information Systems and Dr Solomons – that the combined company has made since then. These products will never be integrated, and as far as I’m concerned they just tried to pull the wool over everyone’s eyes by calling it a suite, writes pieces_of_EIGHT. Why put faith in a company that is not upfront and tries to create its value through deception (PR and Accounting)? Larson insists that NAI’s policy of growth through aggressive acquisition has been implemented with integrity, that the products thus acquired will be integrated into cohesive suites in due time and that NAI’s customers, if not its investors, get it. It’s precisely that strength through diversity that will help us build a multi-billion-dollar business, Larson explains. As for the allegations of accounting impropriety: The numbers are squeaky clean, he maintains. In spite of present difficulties, Larson says he remains confident about NAI’s chances of eating the soft underbelly of bitter rival Computer Associates. We have good wind in our sails, says Larson, this company is well on its way to becoming the next great enterprise software company. I don’t know what other rumors I can address, he concludes. Some short somewhere is bound to think of something.
