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Technology Stocks : Corel Corp.
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To: A. Hayer who wrote (3826)12/11/1997 2:17:00 PM
From: Mr. Bean   of 9798
 
AH quoted "Corel says it did so because it believes the stock was and is, undervalued. A Corel spokesperson said the buyback was the best use of the company's cash."

This indicated very clearly that if management would take operating cash and reduce the outstanding shares then two things can be summized.

1) They do not plan on needing the cash to cover losses, new Capital appropriation or Buyouts. We can assume that they plan with great confidence to not become cashflow negative.

2) They firmly beleive that not only is the stock undervalued but a great potential of increase. Increase based on pending news or financial results. I would guess financial results.

Maybe Cowpland predicted a loss of some 20m for 4Qtr knowing the stock price would drop and stay low for a period with the plan to repurchase shares at the new low price. If the results are not as bad as expected and up she goes.

Could Corel resell this stock that was just repurchased at the new higher price?

Mr. Bean
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