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: Don Earl who wrote (20516)	3/2/1998 10:38:00 PM
From: M Goodson	Read Replies (2) of 42771

I'm evidently not with you here. You wrote that the company took a $55 million restructuring charge that would save the company about $100 million per year (~$25 million per quarter). It seems to me that the $20 million reduction in operating expenses were further results of the restructuring. Are you saying this reduction is bad? If so, I differ considerably. Without the reduction, the company would not have posted a profit. Your comments regarding guidance are funny given the recent publication of that complaint notice. In Schmidt's shoes, I wouldn't say much of anything either. As to why the company didn't choose to restructure prior to 3Q97, I haven't the foggiest. Sounds like a good one for Marengi to answer. The restructuring was led by the new blood of the company. Schmidt applied textbook treatment to the company: If you're going to have a bad quarter, get it all the bad stuff out at one time. Write off the bad debt expense and the obsolete inventory, and clear those channels. Downsize your employee base and sharpen the company's focus. Until the company fuels some sale's growth with its new products, operating expenses should clock in per quarter around the same level.

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