Fun_People Archive
17 Jan
Morgan Stanley Downgrades Netscape

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From: Peter Langston <psl>
Date: Sat, 17 Jan 98 04:40:51 -0800
To: Fun_People
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Subject: Morgan Stanley Downgrades Netscape

Forwarded-by: spl@szechuan.UCSD.EDU (Steve Lamont)
[forwards out acting on Strong Sell signal]

	Morgan Stanley Downgrades Netscape to "Fucked"

NEW YORK, Jan 5 (Reuters) - Morgan Stanley said its analyst Dwight Harbinger
lowered his rating on Netscape Communications (Nasdaq: NSCP) from
"Outperform" to "Fucked".  Harbinger summarized, "They're fucked!  I don't
know what the hell they're going to do!"

Netscape's preliminary earnings report, out today, portends a -750 percent
surprise in quarterly earnings.  Harbinger said in a research note that the
company was still working hard to make the quarter, and that there is a 17
percent chance that Netscape will report an operating profit.  "But there's
only a 3 percent chance of that," he added.  "Man, are they up shit creek."
Harbinger declined to characterize them as either with or without a paddle.

The report stopped short of declaring NSCP's demise imminent.  "It would
absolutely amaze you how long they can limp along like this," it stated,
while cautioning that further downgrades were possible in the near future.
According to Dataquest analyst Steve Shmaltz, "Most people are only aware
of a few of the investment rating categories used by Morgan Stanley, from
'Strong Buy' to 'Strong Sell', but actually there are twelve.  'Fucked' is
level 9 -- just one level below 'Worthless' -- and is currently applied to
only two companies, NSCP and Netalavista, Venezuela's state-run Internet
'browser' software company."  Should NSCP be further downgraded, it would
be the first time in decades that they have used one of the lower ratings:
"Fucked Raw", "Fucked Bloody", and "Abso-fucking-lutely Totally
Shit-Fucked."

NSCP's preliminary earnings report noted that its fourth quarter
restructuring charge of about $35,000,000 will enable the company to focus
on the enterprise software business.   NSCP sees one-time charges continuing
to grow, topping off at 80 percent of total expenses sometime next year.
Investors tend to view such one-time charges as a positive, instead of the
strong negative associated with operating losses.

Netscape, long a darling of Wall Street, is widely hailed for its innovation
in finance juggling.  But some observers are saying that Netscape may be
out of tricks.   "They could lay off their entire work force.  That would
let them write off this quarter's payroll as a one-time charge, and hiring
them back next quarter will make for even bigger `restructuring' charges,"
suggested Lehman Brothers analyst Felix Pappalardi.  "Beyond that, they're
fucked!  I don't know what the hell they're going to do!"

"We plan to address these issues immediately," said Jim Barksdale,
Netscape's president and chief executive officer.  "To accelerate our
transition to blah bla-blah, blah streamline, bla-blah blah focus, blah key
enterprise market opportunities.   Bla blah investments blah blah position
bla-blah blah industry leader blah blah growing blah blah Internet.  Blah
blah I'm not wearing any pants!  Blah focus blah aggressively pursue blah
blah blah return to profitability in 1998.  Blah blah nurse!  Where's my
colostomy bag?  Blah bla-bla blah we're fucked!  I don't know what the hell
we're going to do!"  The Pillsbury dough boy, Netscape's Executive Vice
President of Product Development, was unavailable for comment.

"Maybe they can blame it on Asia this quarter," said Internet.com `analyst'
Steve Harmon, noted Netscape cheerleader.  He sees a positive side to the
loss.  "Beyond a certain point, you can't have such tremendous one-time
charges without also having consolidated losses." Harmon reiterated his
strong buy rating on the company.  "I like this high-growth, high-risk,
high-reward company."   NSCP losses grew 87 percent this year, and analysts
say they could grow even more next year.  Added Harmon, "What are you
looking at?  You can't make me say they're fucked.  Nya-nyah!"

[author unknown]

© 1998 Peter Langston