JNPR A Scam, According to Barrons
(Oh, and they forgot to tell you about Toshiba's NOV 13, 2003 lawsuit against them as they ramped the stock to $30+++)
Wall Street, as you might expect, is delighted with the burst of merger activity. Shareholders, on the other hand, aren't necessarily besides themselves with joy. Comcast stockholders, for example, have exhibited their displeasure by selling shares, a spoilsport attitude that nonetheless is making something of an impression on management. For that matter, even in this nourishing climate, announcement of a deal invariably evokes a certain amount of skepticism. Nor are recently favored high-tech outfits immune. When Juniper Networks, a leading maker of Internet routers whose stock in the glory days sold for 244 and closed Friday at 25 and change, agreed to buy NetScreen Technologies, which is into integrated network security solutions, just about everyone applauded. But not Porter Stansberry.
Porter is proprietor of the imaginatively named Porter Stansberry's Investment Advisory, a Baltimore newsletter. The deal involves a swap of stock; for $4 billion worth of Juniper shares, Juniper gets a software company with $51 million in earnings last year, and at the end of fiscal '03, $300 million of Netscreen equity and $50 million in cash. To Porter, the deal makes absolutely no sense, but he's quick to concede that "Wall Street and TheStreet.Com's James Cramer predict great things will come from it." A big reason why he thinks the deal makes no sense is the competitive pinch NetScreen faces from "new, cheaper, distributed software from a private company, Sygate."And he suspects the acquisition was not unrelated to the competitive pressures confronting Juniper in its basic business from Avici Systems. Porter also finds it more than passing strange that Juniper 's CEO has been dumping stock with a vengeance. Ah well, there's one in every crowd -- thank heavens.
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