Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: Elmo Gregory who wrote (20490)	2/28/1998 9:08:00 PM
From: E_K_S	of 42771

Hi Elmo- It is interesting that the web site you referenced (http://wsgrgate.wsgr.com/Resources/Sec_Lit/Recent/veil.htm) is from the firm Wilson Sonsini Goodrich & Rosati. I believe Mr. Sonsini is one of our Board members but not a member of the audit committee <gr>. According to the article, one of the "non-coverage" exclusions for insurance coverage is for "dishonest conduct": "...A third factor in this dynamic was the threat of non-coverage. Some carriers took the position that, if the company felt it had a serious exposure in the suit, then one of the exclusions (e.g., for "dishonest conduct") would probably kick in, obviating any need for the carrier to pay. Some carriers would routinely assert the possibility of rescinding the policy, based on some amorphous misrepresentations in the application process..." I wonder if there was any "dishonest conduct"! What a soap opera but oh how real this is and unfortunate for Novell. Also, I was not aware of the huge naked "PUT" sale that the Board approved back in 1996. I assume the company was assigned these shares. I wonder, was this considered part of the announced stock buy back in 96 (at an average cost of $13/share ?)...or did we end up loosing another $90 million as a result of this brilliant decision? I guess this loss has not been reflected in the income statement or balance sheet as the purchase of stock by the company is carried on the books at cost. Only until it is sold will the profit or loss be reported. EKS P.S. I suggest all investors read through the entire alleged complaints in the class suit. It is very long but does paint a different picture from what the company disclosed during this period. (http://securities.milberg.com/mw-cgi-bin/dv_runpdn?pdn=/MW/papers/Cases/filings/Novell_Inc&conf=/MW/conf/rwtd.conf)

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