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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: Rich Young who wrote (20434)2/27/1998 7:08:00 PM
From: Don Earl  Read Replies (1) of 42771
 
Hi Rich,

I wonder if the folks that bought today at 10+ will want to file a suit when they start wondering why cost of sales was $7 million less this quarter than it was in Q2 when sales were only $90 million. And why R&D dropped so much when the 10K stated they expect to spend more on R&D (R&D has been more or less a fixed cost for a long time and is based primarily, I believe, on employee salaries). And NDS for NT shipped about a week before the end of the quarter and accounted for another $6 million in sales (if it goes into the channel it counts as revenue).

Of course these folks already know (or should) that the company just reported the worst quarterly revenue in three years, with the exception of those quarters where they didn't ship boxed product to correct for channel stuffing.

Wouldn't it be funny if, say, some little thing like a few weeks worth of salary, didn't show up on this Q but shows up next Q? With sales still declining at a rate of about 6% per quarter?

The part that amazes me the most about the recent price movement is that virtually every negative opinion I've had over the last few months on Novell was based on my belief that they wouldn't be able to scrape up much more than $250 million in revenue for the quarter.

Regards,

Don
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