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: Jean Sutherland who wrote (3092)	8/31/1996 11:08:00 AM
From: E_K_S	of 42771

Analysts: NOVELL ripe for takeover San Jose Mercury News, August 31, 1996 Section: Tech Ticker Novell, Inc. is likely to become a takeover target for Netscape Communications Corp. or other technologi companies amid an extended decline in its revenue and share price, analysts said. The maker of computer networking software is losing market share to Microsoft Corp. and others as corporate customers switch from Novell's aging NetWare 3.0 software to prorams better suited for the Internet. ======================================================= Here is another potential suitor to add to our list. NetScape is looking to expand it's corporate campus in big way! Continue to watch large block trade 'Buys' over next few weeks. EKS P.S. Remember several of the 'key' assets holdings 1) $1 Billion Cash 2) $ 200 - 300 million equity investments 3) $ 40 million land in San Jose and very marketable and liquid. 4) Other buildings and capital assets (??) $100-$200 million 5) Price to sales ratio 2.2 (and falling) Microsoft is at 9! 6) 3.5 million site licenses ready to renew or upgrade (given the right marketing and corporate package). 7) 55 million end-users which need some NOS to run their business. Therefore: I see assets at $2 Billion ($1.4 Billion very liquid) which translate to tangable book value of $6.00/share. The software franchise is going at $4.5/share. Why the stock buy back by Novell. (1) Only way to support stock price. (2) They needed to reduce outstanding shares. (3) One way to maintain good fundamental balance sheet w/ WordPerfect sale rather than showing HUGE one time loss. They elected to show the loss in a reduction in stock holder's equity "over-time".

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