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Technology Stocks : Corel Corp.

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To: Jambo who wrote (70)	4/29/1997 4:50:00 PM
From: A. Hayer	of 9798

The switch to US GAAP should not have a negative effect on the stock. In fact, it should be positive. You should keep in mind that the one time write-off is an item which does not involve cash just like depreciation and amortization. The company would report the write-off as an unusual item and what we will start to see are the real operating results. The operating results excluding this unusual item will look good. This has not been the case for the last 4 quarters since the WP aquisition has been amortized and included in Cost of Sales, making selling margins and net earnings look terrible. You may want to look at Geac Computer Corp. (Cowpland is a board member) who recently had a large write-off (US$121M) related to the Dun & Bradstreet aquisition last year and see how they reported their results. geac.com Their stock did not tank because of the write-off. chart.canada-stockwatch.com If Corel does go lower, I don't think the one time write-off will be the cause. Corel will probably go lower if Q2-97 sales are disappointing or if operating expenses go out of hand. The recent dip in Corel's share price is due mainly to Microsoft's very very strong Q3 earnings and uncertainty towards Corel's future. ah

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