COREL BUYS BACK STOCK
canoe.ca
By SIMON TUCK -- Ottawa Sun
COREL Corp.'s massive purchase of its own stock in recent days proves the firm's self-confidence, CEO Michael Cowpland said yesterday.
Responding to reports that he sold $20.5 million of his own Corel stock in 10 separate trades in mid-August, Cowpland said the Ottawa-based firm has been buying between 10,000 and 20,000
of its own shares every business day since Sept. 22. The buying spree will continue "pretty well indefinitely," he said. "We think it's a heckuva buy at this price," he said. "We're putting our money where our mouths are." but less than two months ago, the Corel boss was putting his money in his pocket. The big sale came about a month before the firm's share price plummeted $1.95 (or 21.9%) in
three days as investors digested news that Corel was poised to lose a record $32 million US in its third quarter.
According to insider trading reports Cowpland filed with securities commissions across the country, he sold 2,431,200 shares -- more than one-quarter of his stake in the company -- between Aug.
11-14 as the stock price ranged from $8.20 to $8.80. He said yesterday he had to sell the shares to pay some taxes and other debts and pointed out that he still owns 10% of the company's stock.
While the optics of the sell-off may not be pretty, Cowpland said, the stock price wasn't affected by the sell-off and doesn't reflect his optimistic view of the company's future.
"It's not necessarily that you want to sell them (but) sometimes you have to." Cowpland said he'd buy some more Corel stock for himself if he had some spare cash, but added: "I don't really need to because I've got lots." Corel stock closed at $5.55 yesterday on the TSE.
Analysts, most of whom have been less than sympathetic to Corel's plight in recent weeks, used news of the stock sale yesterday to again question the company's position. David Wright, an analyst
with Marleau Lemire Securities Inc. in Toronto, said he expects the company's stock to plummet further, perhaps as low as $3 US. "They've got some issues to deal with." The irrepressibly optimistic Cowpland said the analysts' dour perspectives on his company are
understandable because their focus is "quarter by quarter."
Cowpland said Corel's stock is far undervalued and expects it to return to the $15-25 range "very shortly," once the company's new line of products are released beginning in a matter of weeks. "We're just on the point of a surge forward I think." The company is poised for a period of "hyper growth" and should enjoy revenue jumps of 30-40%
a year for the next few years."
I've PUKED so much over Cowpland, I now have the DRY HEAVES!!!
Mr. Yellow Waxed Bean |
