Actually they have put it to use. The UNIX purchase, Wordperfect, etc., they have simply done a very bad job, at valuation and management. If you look at news.com you will see a news article where Corel (much smaller and less resources than NOVL) has turned Wordperfect into a valuable asset in less time than NOVL had it. They are also almost finished with Java Office, which they have already licensed (for cash) before completion. The Wall Street mentality is that you are purchasing mgmt. when you purchase a company, and other assets are ancillary.
My opinion is to take about (these are illustrative numbers) $200 million and create one of the richest shareholder value-based meritorious deferred comp plans in the industry. That way, there would be minimum defections, and an attraction of real talent looking for a challenge. An extra $100 million should go to markting and PR with DEFINITIVE performacne breakpoints and goals for measurement. R&D, strategic partnerships and technology licensing should get an extra $75 million and the balance should be invested in a structured cash management fudn that would boost the income rate to just under 7% percent.
These are real investments that (for $150,000 in options - that's what I would charge intially), can be communicated directly to the financial community with firm projections that illustrate the potential impact on FCF and shareholder value. These investments and communication strategy are real investments that will gain the respect of the big boys on the street. And before the first dollar is spent, each project should be modeled out with all probable scenarios (using the modeling techniquues that the bankers use, the NOVL analysis on my site is an example) so as to lessen the "surprise factor."
Enough free info, if the NOVL crowd is listening, you should give me an email. |
