Securing Computing’s stock price (SCUR, Financial) was beaten up last week because of the weak earnings reported. The company sells products and services that secure corporate networks. It is not the biggest player in the field. Symantec and Cisco are much larger rivals.
SCUR is a much smaller niche player in the corporate firewall market. To survive, SCUR has to become bigger. It does so by gobbling up two companies within the past year: it bought its direct competitor Cyberguard for $295 million in 2005; This year it bought CyberTrust for another $270 million. These two deals depleted Secure Computing’s cash, diluted its shares by 50% and incurred about $100 million long term liabilities. The Wall Street apparently didn’t take these acquisitions lightly, punishing SCUR’s stock from a 52-week high of $15 down to $6.
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SCUR is a much smaller niche player in the corporate firewall market. To survive, SCUR has to become bigger. It does so by gobbling up two companies within the past year: it bought its direct competitor Cyberguard for $295 million in 2005; This year it bought CyberTrust for another $270 million. These two deals depleted Secure Computing’s cash, diluted its shares by 50% and incurred about $100 million long term liabilities. The Wall Street apparently didn’t take these acquisitions lightly, punishing SCUR’s stock from a 52-week high of $15 down to $6.
Read the complete article
