Data Collection and Analysis Memo

Symantec The anti-virus software company Symantec (NASDAQ symbol: SYMC) makes Norton antivirus software, one of the industry's leading anti-virus programs. This paper investigates how Symantec fares against Network Associates, Inc. (the makers of MacAfee anti-virus software) in terms of the relationship between revenue and computer virus outbreaks, as well as overall averages. Specifically, stock quotes for Symantec and Network Associates will be compared post-virus outbreak for each of these four major outbreaks: 1) Blaster, Category 4, August 12, 2003, 2) SoBig, Category 4, August 22, 2003, 3) Bugbear, Category 4, October 2, 2002, 4) Klez, Category 4, April 25, 2002, and 5) Sircam, Category 4, July 24, 2001.

Ultimately, there is a small decrease in stock price for both Symantec and Network Associates the day after a major virus outbreak occurs. One of Symantec's main competitors in terms of industry anti-virus software is McAfee, a business unit of Network Associates, Inc. Currently, Symantec employs 4,300 people, with a market capitalization of 12.96 billion, while Network Associates (NASDAQ symbol: NET) employs 3,800 people, with a market capitalization of 2.84 billion. Symantec had total revenues (ttm) of 1.70 billion, and Network Associates had total revenues (ttm) of 932.52 million.

Symantec's revenue growth (ttm) was 0.00%, while Network Associates' revenue growth 28.60%. Symantec fares well against the competition in terms of the relationship between revenue and computer virus outbreaks Blaster, SoBig, Bugbear, Klez, and Sircam. Symantec stock prices closed at 47.66 on the day that the virus Blaster (August 12, 2003), with a slight stock increase to 47.98 on August 13, 2003. Network Associates showed a similar pattern, closing at 11.12 on August 12, 2003, and 11.32 on August 13, 2003. The SoBig virus showed a small stock decline for Symantec, which closed at 54.74 on August 22, 2003, and 54.3 on August 25, 2003.

Network Associates showed a small increase, from a close of 13.18 to 13.45 over the same period. On the day the Bugbear virus hit (October 2, 2002), Symantec stock was 31.67, but fell significantly to 29.6 on October 3, 2002. During the same time frame, Network Associate's stock fell from 9.38 to 8.75. On the day of the outbreak of the Klez virus (April 25, 2004), Symantec closed at 35.93, with a reduction to 34.15 the next day. Network Associates showed a smaller reduction from 18.89 to 18.6 over the same timeframe.

On the day the Sircam virus hit, Symantec stock was 46.9, showing a rise to 47.45 the next day. Network Associates stock rose significantly from 13.58 to 14.45 over the same period. In summary, for the five virus threats listed here, Symantec stock quotes showed a fairly small decrease in three cases. Network Associates showed a decrease in three of five cases as well. Taken together, this indicates that a virus threat may have a reasonably small, industry-wide negative effect on stock for anti-virus software companies.

It is important to note that both Symantec and Network Associates make a wide range of software products, and this diversity of business may help ameliorate the negative effects felt by a serious virus attack on company stock. Given this wide range of business activities for both companies, it is difficult to discern the degree of impact that virus threats have on either Symantec or Network Associates' stock. Over the past 52 wk range, Symantec stock ranged from 18.18-42.30, with an average volume of (3m) 3,831,045. Estimates for Symantec's.