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: M Goodson who wrote (20552)	3/3/1998 1:31:00 AM
From: Don Earl	Read Replies (1) of 42771

Hi M, I don't think I made myself clear enough on that one. My point was that I don't believe the sudden $20 million drop in expenses is honest. Just like I didn't believe the sudden jump in investment income and educational sales were honest last Q. The drop in expenses this quarter could not be a part of the restructuring. That was a done deal 6 months ago. $20 million = .06 EPS. Novell likes to play games with the numbers. With declining revenue it was about the only way to prop up the stock price. I wouldn't be too surprised to see the $50 million slush fund Schmidt has set up all of a sudden show up as a one time charge against R&D expenses. The trouble with Novell is that they have a "bad quarter" about once a year to "get all the bad stuff out at one time". The problem is that all the "bad" quarters are a direct result of fixing the 3-4 "good" quarters before it. Cutting an extra $20 million in expenses would be wonderful news if it were something that could be counted on and not a book keeping trick to defer expenses until a later date. Maybe I spend too much time trying to read between the lines but it just looks a little too "convienient" to me. There are a lot of in between the lines things that make me think Novell is in deep KaKa. Novell is always quick to tell the world about anything that could possibly be good for the stock price. Anything that could be taken as bad news if an honest answer were given results in "no comment". One of the worst PRs I've seen lately was the one about selling a 5000 seat NetWare to some third world country. At full retail the sale would be less than $250K, with the usual discounts it's probably around $150K. Not exactly a major coup for a company of Novells size, especially if they were showing off the pick of the litter. Regards, Don The usual disclaimer about expressing my opinions apply. I'd rather not get any of those late night calls like those Joe complained about.

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