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Optical/IP

Net.com Shareholder Digs In

As Network Equipment Technologies Inc. (net.com) (NYSE: NWK) approaches its second-quarter earnings conference call on October 15, a Securities and Exchange Commission (SEC) filing shows that a long-time investor has increased its stake to become the company's largest shareholder.

Kopp Investment Advisors, with its affiliates, now owns more than 2.5 million shares, about 11 percent of Net.com's stock, according to an SEC filing released Thursday. The Kopp companies held about 1.6 million shares, about a 5.4 percent stake, as of May 1999, SEC filing show.

Kopp has held Net.com shares since the mid 90s, but almost bailed on the company during the last part of its previous management regime. And, while it cheered CEO Bert Whyte's arrival in 1999, it was skeptical that Net.com would be able to catch its competitors.

"Bert was trying to change the tires on a car while his competitors were driving by at 100 miles per hour," says Steven Crowley, executive VP and senior portfolio manager at Kopp Investment Advisors. "We were afraid that they wouldn't be able to catch up, but the downturn in the market actually enabled them to get back in the battle."

Net.com has clearly benefited from having a large number of government customers for its circuit-switched customer premises products (see Net.com Triples Profits). Over time, however, it will have to prove that its IP products can be just as popular with carriers and governments alike. (And it will need to shore up its soccer to defend itself in the event of a Light Reading rematch -- see Light Reading 10 (11?) Net.com 8 (9?)).

Shares of Net.com rose $0.13 (1.24%) to $10.63 in trading on Thursday.

— Phil Harvey, Senior Editor, Light Reading

steviescmr 12/4/2012 | 11:20:50 PM
re: Net.com Shareholder Digs In nothing like a little legacy mux biz with the feds to keep the company going. bert is lovin W right now. and i think i saw him at a rally for arnold the other day, making sure those easy govt contracts keep coming his way.

rbkoontz 12/4/2012 | 11:20:50 PM
re: Net.com Shareholder Digs In While Bert is a charmer, I don't think he can put enough lipstick on this pig to sell it. NET was a nice little enterprise company, but they will never make it in the carrier world. Their IP products come no where close to meeting true carrier class requirements. They simply don't have the experience in engineering, marketing or sales to ever win a large carrier. So, without a viable CLEC or ISP market to sell to, or the right feature set for cable MSOs, they are simply dead.

I do applaud NET for their interesting vision and innovation. Its just too bad they do not have the skillset to package it up RBOC-style.

BTW, this article is another example of the preferential treatment LR gives their buddies at NET.
fw23 12/4/2012 | 11:20:49 PM
re: Net.com Shareholder Digs In I've heard rumors that all four RBOCs have been
talking to bert about scooping up his baby. This
is one HOT little TRICK we are talking about
here.

They have a new paradigm for the carrier business
and a business model that others have struggled
to even close to. They are ready to TAKE OFF
like the PROVERBIAL R-O-C-K-E-T. --------->

Bert will be dancing down the asile with one
of them soon enough. My personal prediction
is SBC. But Notebaert at Qwest is one SHARP
COOKIE. He was the first one to see the hidden
value, but there are four cooks and some of them
have bigger knives than Richard does.

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