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: taxikid who wrote (18151)	10/28/1997 11:22:00 PM
From: BP Ritchie	Read Replies (1) of 42771

I see that Gerald Herbel answered your question already. I have a little bit different answer ... and think you should take Joe Antol's advice to read a bit more ... there's a wealth of information about Novell on this thread. I think that what they do better than most of their competitors is write Network Control Software for Intel processors ... their install base (estimates range from 55 to 73 million users) and existing support infrastructure dwarfs all other participants (including MSFT and IBM) in the Networking Operating System market segment. I also think that they have been quite ineffective at selling products outside their traditional customer set ... which is a big problem because MSFT has managed to shift the market over the past few years so that Novell's traditional customers are no longer in control of the bulk of the buying power ... If Novell could market and sell as well as MSFT their stock price would probably be at least 10X what it is now. I think they've been trying to 'buy' the talent they need, but it hasn't become obvious that it's working for them yet. Still their Intellectual Property Assets, install base, and 'hard assets' are probably worth 3X their current market cap ... but, shareholders won't be able to realize even that profit because the current Management (including the BOD) insists that they will not sell the company ... they seem to think that they will solve their marketing problems and give us all even better returns through increased revenue & profit ... not very many people believe them, especially professional investors ... seems that Novell management has broken too many promises in the past. Tough to predict the future ... but, I believe they finally realize the circumstances that they are in and will try very hard to make some real money for shareholders soon ... and if the current management can't pull it off, the BOD should (but might not) change positions on the 'company for sale' issue ... so we could get at least some premium on current prices in a year or so if the better results don't show up in the next 3 or 4 quarters. Then again, if these guys do manage to return Novell to it's former position as the leader in this market ... we could expect much more than a 10X stock price increase in 12 to 30 months ... but, nobody seems willing to put very much money on that scenario ... even Novell's management doesn't seem to be buying. There's enormous potential in this company, but the folks running it for the past 4 years didn't seem to know how to put it to work properly ... now the new management seems to understand the problems, but still has to deal with the reputation and past broken promises. I don't expect any major price moves for the next few months, others seem to think there will be 30 to 50% moves based on 'TA' and other mystical prediction systems that I don't understand. I think the price will creep up slowly for the next few months ... then either 'launch like a rocket' or 'drop like a stone' when we get to find out how their new marketing and sales efforts are working out ... probably have at least 2 quarters to wait before we get some decent measurements that we can use to figure it out. Best wishes for your new Novell investment! And welcome to the NOVL investors 'therapy group' ... kind of like an AA chapter.

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