I have experienced three portfolio buyouts this year, FORE,VLSI, And DGN, all of which had the following similarities for several months prior to deal announcement:
>frequent company press releases/interviews confirming improving operations, as well as exciting new products, partnerships and market opportunities.
>strange weakening of stock price...counter to improving company fundamentals. high frequency of negative messages on Yahoo, primarily from new posters, containing no facts or rational discussion, and obviously trying to provoke fear.
These unusual similarities, for each of the stocks mentioned above, suggest that the acquirers could have orchestrated the weaker stock prices through special market strategies executed by their merger/acquisition "hired guns"...for many months prior to revealing their buyout deal. The weakened stock price improves appeal of the buyout price; management gets pressured to support the "attractive" deal; frustrated shareholders are relieved to accept the offer, after seeing their stock beaten up for several months.
This can be happening to NOVL behind the scenes, at this
moment...especially if Schmidt and the Board have been spurning overtures from a potential acquirer who may now have turned hostile.
Already, I've read the posting of one NOVL shareholder who said that he would now be willing to accept a $28 buyout, after experiencing a $10 drop from $31 level in just two months. (Could the sharp rise then drop of the stock reflect the workings of a "hired gun" for the hostile acquirer?) While some are starting to give up on NOVL, I'm staying focused on NOVL's strongly improving fundamentals, and will not let this strange price action get to me. Over the next few years, as NOVL accelerates its growth strategy, I expect to see NOVL's stock price rise to a price level far beyond any acquirer's price today....just the personal opinion of a CNL (certified Novell Long) |
