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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: Sir Francis Drake who wrote (31775)5/21/2000 11:43:00 AM
From: Paul Fiondella  Read Replies (1) of 42771
 
Thanks for the information

I would take exception to one part of your statement --- "this is not a stock that tends to rocket."

Actually the move from 30 to 43 in a relatively short time frame was characteristic of internet rocketing stocks. It is what caused me to immediately sell Calls on my long term position.

What I think influenced your judgement about Novell was the perception that unlike the internet stocks which have a long term trend line up and have many rocket periods, Novell wanted to wear the internet mantle but couldn't quite be fit into that suit in WALL STREETS PERCEPTION (see Cramer et al.). The management was too old line and didn't get it. So Novell has an analyst community always looking at the bottom line --- revenue as proof of concept, not at Novell's technology.

And that is why you have to be very very careful labeling Novell as not like the other internet stocks. And ask yourself what does somebody like Gilder, who sparked the rush into Novell in December know about the internet that the general public investor (and the talking heads like Cramer et al that drive this crowd) hasn't figured out yet.

What I saw at Brainshare was Drew Major creating the first internet operating system. Sure Inktomi has a piece of this and Cisco has a piece of this, but it is Novell that has all of the pieces. It is what is happening amongst the people like Drew at Novell who understand the internet and are at the cutting edge of internet technology that most excites me about the unpercieved value in the company.

The question now is whether Eric Schmidt will free up this creativity and release this value into the stock, by creating a separate internet division to commercialize it. Will Eric understand that he has to open up Novell to new management ways of thinking in this area? Or will he let Nelson tighten up with the conservative closed shop attitude that has harmed Novell so much in the past?

I spoke about this at the annual meeting. I know it was on his mind. I can only hope that that he will say something on Tuesday to show the analyst community that Novell understands the internet much much better than everyone except Gilder has given them credit for.

If Eric says the right things and does the right things with management at Novell, then anyone that buys NOVL at $9 is going to be a very happy long term investor.

I'm waiting for Tuesday.
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