Hello Salah,
As always, I want to compliment you on your insight and analysis. You always seem to be able to cut throught the emotional rhetoric and comment from a position of analysis. I always have to think for a while after reading your posts ... I hope that you continue to follow this stock!
From your post, I wanted to offer some opinion (as usual) and comments. ;-)
> Clearly, there are some considerations to be factored in since that
> post (late June 97), unfortunately, all of these are negative, here
> they are:
I don't agree, IMHO, that all of these are negatives ...
> 1. Resignation of Denice Gibson
I do not think that this is, in any way, a negative. I think that it was a good move for both parties that this seperation took place. Denice contributed to Novell in many ways, however I do not see her departure as a negative.
> 2. Delay of Moab from 12/97 to mid 98, this will give MSFT the
> chance to freeze the market with NT5.0 release around the corner.
If you have been following the press, then you obviously know that both companies have shipped Beta versions of the products. But you should also already know that the ship date for NT v5.0 (which you refer to as "around the corner") is now off into 1999 sometime ... or at least it has become very indeterminate.
NT v4.0 is still very incomplete as a desktop OS, and is missing many key features for laptop users. Microsoft has a lot on it's plate and has created a product that has almost one order of magnitude more code to maintain than other operating systems.
Active Directory, although competing on mindshare, is extremely incomplete and more limitations are going to become public in the coming months. I think that this is possibly one fo the contributors to the delay of NT v5.0 ...
> 3. No change of the BOD
I know that I have learned a lot from you and others on this thread (yes ... you too Joe!) about this area. I *would* suggest that there have been changes in the BOD since Eric has taken his place, but I would agree that no actual change in people on the board have taken place. I will trust others who have more experience as to whether the addition of a new Chairman ... a change in the hierarchy ... can effect things enough.
> 4. Insiders are selling
This is a rather broad statement. I would suggest that from the co-workers that I know, insiders are buying also. I know numerous people who are a part of the Novell stock purchase program, who are putting the maximum amount of money aside each month to buy stock, and who are holding it after they buy. I know of numbers of shares being bought this way that far exceed the paltry 1000 shares/month being talked about here on this thread.
I know that many people will bring up the fact that David Bradford and Glenn Ricart have been selling stock, but the numbers (to my knowledge) have not been significant, and I do not know that these two individuals represent a major sentiment in the company to "bail out" of the stock.
> 5. BorderManager sales are not hot, 27M in Q4 vs my expectations of
> 30M, not 1.0B product as the company stated
I would suggest that they are doing quite well and growing rapidly. Numerous accounts are evaluating and recognizing the power of this technology. And we are seeing more accounts that recognize that this is a "platform independent" solution, much as a Cisco router is, and can be used in corporate and ISP environments successfully.
In my opinion I felt that we had a very good first quarter for a v1.0 product ... and we just got started. Don't touch that dial ... ;-)
> 6. Revenues for Q1-98 are flat or slightly less than Q4-97
I can't argue this ... but I can say that you seem in agreement with Eric on this point. I believe that is what he has been telling analysts.
> 7. It is not clear whether there is channel stuffing or not, I
> thought they said after Q3 results were announced that channel
> inventory is 45 days, now they are saying they will try to get at
> 45 days or less and the DSO is 79. How are all of these jive
> together?. I don't know, and I will leave this one to
> the guys who own the stock to figure it out.
I too have to leave this one to others. I am always amazed at how you, and others on this thread, are able to interpret and dissect the numbers ...
> 8. No products to address the low end
This is again an interesting area. I won't go into detail, but I'm not sure that I agree with this, and/or the need for this.
> 9. Marketing hasn't improved much
I'm glad that you didn't say "at all" ... with this statement you seem to acknowledge some small amount of improvement ... and that's what I want to see ... ;-)
> 10. They lost money on operations in Q4, 5M-6M
I will have to read more to better understand this ... I'm not sure the details of this and what the implications are. When you say that we lost money on operations, does this mean that operations had an additional expense of 5M-6M? I didn't know that operations was supposed to profit ... again, my ignorance of exactly what this means. (Any explanation would be welcomed ...)
> And Irene, my predictions for Q4 were wrong and I apologize if I
> misled anyone, but I would appreciate it if you can tell me how to
> improve on my lousy prediction capabilities <smile>.
I would say that between you and Jim McCormick(?) you are providing some incredible insight to me on how to better evaluate the numbers and what they mean.
> Happy Thanksgiving to all
Likewise ... and thanx for the post!
>Regards
>
> Salah
Scott C. Lemon
P.S. I have to say that after the announcement I couldn't help but to grin for almost two days ... this is getting fun! ;-) |
