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: Joe Antol who wrote (895)	5/31/1996 5:22:00 PM
From: vinod Khurana	of 42771

Hello Joe, I really don't see $28. When NOVL last traded in the high 20's, there was an expectation that their growth would continue at 25% + annually and that other products such as UNIX, UNIXWARE, WP and Quottro Pro would add to the bottom line. The revenue that was expected from these products did not materilise. Instead of adding value, they reduced equity by at least $3/share and made a good situation worse. Taking out the expected earnings from these products, the stock in my opinion will have a hard time crossing $23. For the stock to go beyond $23, (1) NOVL has to recoup the $1 billion it lost in the sale of WP. (2) NOVL has to regain the earnings momentum (3) NOVL had better keep its 65% marketshare in server O/S and (4) the market must be convinced that NOVL's other line of products will add considerably to the bottom line (internet/intranet products). In my opinion, none of these is likely to happen Point #4 is a question mark at this time since the internet/intranet market is fairly new and no one company has got the stonghold....yet. MSFT and NSCP are the likly candidates. What I think this will mean over the long term is that the stock price will hover in the upper single digits to the high teens. Lets face it, NOVL needs the backing of a large partner. Not for financial reasons since the $1.2 billion they have is more than sufficient to keep them going for many years to come but to change the perception users have of the company. NOVL has made some serious mistakes in the past and nobody is going to forget that overnight. It will take a company that users percieve as successful to change that perception i.e HWP . On a seperate note, a CNE came by my desk this morning and told me that he received a letter from NOVL indicating that he has an extension on passing the NW 4.x exams to satisfy the new CNE requirements. Believe me he was very dissapointed. In his words....."Novell is finished. Why not spend the money on learning NT ?. NOVL is desperate for cash". I see $19 by year end. V.K

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