Friday, February 13, 2009

McAfee - Is it Really OK

McAfee Inc (MFE) reported record Q4 and annual revenues, income, EPS and all that good stuff. The financial results are commendable. The stock has surged on the news. Security seems to be an indispensable priority and everyone pays up. Listening to McAfee it sounds like all markets, all products and all strategies are working out just fine.

The problem in understanding the company is most investors do not understand how the security product is constructed. We just understand if it works or fails. One day we know there will be a fail. The question becomes “What are the contingent liabilities” If some one stole money from me because security failed I will sue, as would most people. This risk is unexplained at McAfee.