McAfee (B)

By Jeff Chambers, Alex Tauber
1998 | Case No. E48B
This case continues the story of McAfee Associates from the A case. The company decided to take the investment from the two prominent VC firms and focus on building the company. The company recruited a senior management team and went public in October 1992. The stock price soared immediately after the release to a high of over $23 per share. However, many factors in the environment and some internal troubles contributed to a stock price tumble to under $5 per share. The company searched for a new CEO and found Bill Larson. The case is set shortly after Larson joined the company. He needs to decide how to revive the stock price by making operational and strategic changes. Given the low stock price, he faces three main choices for strategic direction: sell the company, take McAfee private, or use the company’s cash to revitalize and grow the company. Teaching Note available.
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