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V-One shares fall from orbit

Shares in the maker of network security products plunge 45 percent, giving up much of yesterday's 279 percent surge.

Shares of V-One returned to earth today after more than tripling in extremely heavy trading yesterday.

Shares in the Germantown, Md.-based maker of network security products closed today at 6.94, down 49 percent from yesterday's close. The decline removed much, but not all, of yesterday's gains, when the stock surged 279 percent to 13.5 on market-leading volume of 60 million shares.

The run-up was sparked the company's announcement that its SmartGate software will be compatible with version 6.0 of Red Hat's Linux operating system.

V-One's software provides authentication and encryption technology and is used by companies that have set up networks that are accessed by customers and employees. V-One's software is already available for other platforms, including Windows CE.

After the markets closed yesterday, the company addressed the investor reaction to the Linux announcement.

In a statement, the company said it "previously announced that the company expected to make a number of product announcements during the second half of 1999."

Margaret Grayson, chief financial officer of V-One, said in the statement, "We know of no other basis for today's market activity in V-One's shares."

Analyst Eland Danon of La Salle Street Securities attributed yesterday's surge in V-One shares to day traders, who often jump into the latest hot stock to make quick profits.