Investors continue to buy Avant! Corp. (NASDAQ Symbol: AVNT) (Price: $20.0625) stock based on the premise that both the company and its management will successfully avoid civil and criminal prosecution for stealing one of the word’s most unique pieces of software. We believe the evidence against Avant! is highly damaging. In fact, certain institutional holders have acknowledged their belief that Avant! is guilty but continue to buy and hold its stock hoping the wheels of justice will jam. We have stated that Avant! faces liabilities well beyond its ability to pay. Cadence Design Systems, Inc. (NYSE Symbol: CDN) has now disclosed its estimate of the damages. Both Cadence and the State of California are diligently pursuing Avant! and its criminally charged managers. Avant! has failed to separate the interests of its shareholders from these individuals (who are free only because they posted bail.) As a result, Avant! has failed to negotiate a settlement and has merely delayed the proceedings. We believe any settlement would wipeout Avant!’s equity. We further believe that both trials will be held and that the facts provide clear and convincing evidence of Avant!’s guilt.
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