ANET Lawsuit…

Although certainly not binding, this looks like it will be a long and drawn out struggle between ANET & Cisco.

I’ve contemplated a position in ANET, but believe this will be a dark cloud over the stock for some time given the uncertainty of this lawsuit.

I think I’ll stay away from this.



If you believe that technicals reveal the overall investor psychology towards a stock, then this one is super ugly with a high volume plunge below the 200dma. Those that do believe have just moved their money elsewhere.


I find this interesting as I remember a similar situation with PANW a few years ago.

Before the case there was a run up in the stock (I was a holder which I eventually sold out of close to a then peak); during the case which PANW was widely predicted to lose the shares gradually priced in a loss. Even when the result came out when the case was dismissed, the shares remained at a low (admittedly no-one knew whether there was going to be an appeal or a new case brought). That allowed me to buy back in (which I have held since).

ANET appears to have even less of a case and is expected to lose but until now the shares have not seemed to have priced this in at all. Over the last 2 years they have proven very volatile (in contrast to PANW before and after their lawsuit or even other network players).

With an imminent judgment looking negative, I cannot see why anyone would want to either take the risk or be in this stock at all on a Saul investing basis.

I got out of CISCO - the expected winner on the basis that there were better places for my money. Why would ANET be a better place for my money.

If you really want to be in network equipment you could be in slow growth blue chips like CISCO or fast growing newbies like Ruckus or Infinera. Or you can just be in something that grows fast without any lawsuit risks at all - of which Saul and others have identified plenty on this board.

If ANET win then sure - we can re-evaluate. If they lose and the damage is not terminal then again we can re-evaluate but to invest now is just gambling not investing.

The TA and FA risks look terrible for this stock.



For those of you following ANET - they are claiming that not only are they not infringing but in worst case scenario the impacted technology can be side stepped pretty easily without affecting product supply.

I’m not up for the risk but for those interested here’s the article……