Steve, Joe, EKS, ET..All,
Well, I have recieved my long awaited responce from Novell!
Again Marengi couldn't find the time he passed to Peter Troop. What A Pu#@y.
======================================================
Mr. Phillips /
We have responded to your first, second and now third message. We
are aware of your sentiments. Novell has tried to be as clear and
direct as it can in response to your inquiries.
As a matter of policy Novell doesn't respond to speculation and
innuendo, whether in conversation with press, or through emails from
shareholders. As with any public corporation, Novell has an
obligation to disclose information that has a material impact on its
business in a timely and public fashion. With over 100,000
shareholders and millions of individuals with a market interest in
Novell, we make fair and appropriate public disclosure through press
releases and public statements that receive wide dissemination.
For accurate information about Novell, its' products and business
please access the Novell web page at: novell.com
Peter Troop
Sr. Director Investor Relations
408-577-8361
Fax: 408-577-5921
>>> "Scott Phillips" <sdphill@thor.pla-net.net> - 10/31/96 8:02 AM
>>>
Mr. Marengi,
I can see why you haven't had time to write me a responce to the 3
letters that I have sent to you, because you are busy driving the
company
into the sewer. My first message to you Novell was at 11.5, next
message
10.5, this message 9 and dropping like a brick.
Mr. Marengi what in the world are you doing to this company? At
least
under Frankenburg the stock had a little support with slow growth and
slight vision, however with no leader the stock is plummiting, HOW DO
YOU
EXPLAIN THIS? I have a hunch that Q4 numbers are known by someone
who
started the selloff and it just snowballed. Can the numbers be
that bad?
If so how, I mean the channels were cleared almost 2 quarters ago.
Mr. Marengi, I ask you for the third time, WHAT ARE YOU DOING TO
ENHANCE
THE SHAREHOLDER VALUE? What is the board doing about the CEO search?
Nice
move on the media blitz so far the coverage has been NOVELL STOCK
PLUMITS,
my god man you didn't even have to pay for that, nice move. Well Mr.
Marengi the stock is down some 35% since you took over GREAT JOB now
could
you please move on and spare us Novell holders the pain of a book
value
stock. If you can't do the job, just step down. I can assure you if
this
stock keeps falling you will no longer have a choice as shareholders
are
very angry at management right now.
Please could you at least take time out of your schedule of driving
the
stock price to 8 and respond?
A VERY BITTER STOCKHOLDER
Scott Phillips
>>>ptroop<peter_troop@novell.com> - 10/17/96 3:53 PM >>>
Scott /
We did reply to your first message to Joe Marengi. Presuming that
it didn't get to you, I've attached that reply to this message. I
think it addresses the many of the sentiments you've expressed in
your second message.
I'll add one point. In large part, Novell's stock price reflects
Wall Street worries about Novell revenue growth. There is general
agreement in the financial community that Novell's weak stock price
reflects investor dissatisfaction with the company's not delivering
revenue growth in recent periods.
Investors are uncertain about whether Novell will achieve revenue
growth in the future. The financial community wants to see revenue
growth upwards of 20%. In Novell's most recent fiscal quarter, Q3
FY96, revenues of $365 million were down 19% from comparable network
software revenues in Q3 1995.
Management knows that achieving revenue growth is the issue. It is
spending more than $250 million a year in product development with
the objective of creating new products to help deliver revenue
growth. To help sell more of existing products, advertising
expenditures are now running at $20 million a quarter.
But, Wall Street requires more than intentions. For this issue to
turn around and become a positive for the company, Novell needs to
deliver successive quarterly increases in revenue. There really
isn't a substitute for revenue growth over several quarters, and
there aren't short cuts to achieving it.
I understand and appreciate your dissatisfaction as a shareholder,
Joe Marengi does too. The company is working hard every day to try
to make the difference that needs to be made.
Peter Troop
Sr. Director Investor Relations
Novell, Inc.
>>> "Scott Phillips" <sdphill@thor.pla-net.net> - 10/17/96 7:59 AM
>>>
Mr. Marengi,
This will be the second letter to you, I really would appreciate a
responce. Why is Novell stock trading at 10 dollars and change?
This is
gross mismanagement on the part of Novell. With the cash in the bank
the
installed user base and all the new upgrages out, the only answer I
can
come up with is the streets perception of our company. Your pr
department
told me Novell was spending 20 million in advertising, but this has
only
lowered the stock price further. The stockholders are left with no
one
else to blame but management. This is the worlds largest networking
company and to be locked in a 10-11 dollar trading range is absolutly
unacceptable. Your pr department has also stated to me that you have
been
speaking freely with the press? Where and when? Mr. Marengi I am
one of
Novells biggest fans but I am loosing faith fast. Now, if I feel
this way
just imagin how the street feels, as they have no ties to this
company, and
if things continue this way they will never look Novells way. Time
is
short in this business, and inbvestors are getting very impatient
with you
and the company. I understand the company bought back some 10
million
shares and retired them, but is this the extent of steps that
management
has taken to revive this once powerhouse of a company. People used
to fear
Novell now they just think its time has come. Do you not feel that
with
the stock price at such low levels only adds to Novells perception
problem?
Mr. Marengi the time is at hand for Novell, If the stock slips below
10
there are going to be some very unhappy and probably former
shareholders.
Scott Phillips
Stock Holder
>>>ptroop<peter_troop@novell.com> - 10/10/96 1:57 PM >>>
Dear Mr. Marengi,
I am a faithfull Novell investor, and have been for 2 years now. You
can
see why I am not very pleased. I have just a few questions for you
and
would appreciate a response as soon as possible.
Dear Scott,
I'm Peter Troop, senior director investor relations at Novell. Joe
Marengi has read your email message and asked me to respond to the
questions you've raised. Incidentally, you may also contact the
Novell investor relations department by phone at (800) 317-3195.
When you hear the menu, press 5 to speak with someone in investor
relations.
In response to the series of questions you posed, the following
answers summarize opinion and commentary on Novell's business and
conveyed by the company through numerous public venues this year.
Novell's public statements include forward looking statements made
under the Safe Harbor Reform Act of 1996.*
I encourage you to access www.Novell.com and go to company
information, and the investor relations page,
www.novell.com/strategy/finance.html, to read *Corporate
Background Information* summaries. These materials provide an
overview of Novell strategy and direction, and reference press
releases, speeches, briefings and other Novell related information.
The Novell web page has an extraordinary amount of detail about
Novell products and services, their competitive positioning and
worldwide availability.
1Q. What is actually being done to enhance shareholder value?
Rebuilding shareholder value is an overriding priority for Novell's
management and board of directors. We intend to deliver to investors
the full value of Novell's leadership in network software and will not
be satisfied until we do.
Novell is the largest provider of network software in the world. We
are the world's fourth largest software company. Based on Novell's
third fiscal quarter, the company's annualized revenue run rate is at
$1.5 billion. Novell generates more than two times the revenue
Microsoft achieves from network software. In our most recent quarter
we delivered more than five times the revenue of Netscape. On the
earnings side, Netscape earned $528 thousand in profit, Novell $59
million.
In the third fiscal quarter, we returned after-tax profitability to
16 percent of revenue -- approximately even with the 16.6 percent of
revenue achieved in 1995. That places us in the top third of
companies in our industry, and well ahead of most other companies
regardless of their industry category.
To put our performance in perspective, Novell's rate of profitability
was ahead of Oracle, Informix, Silicon Graphics, Sybase, Adobe, 3Com,
and Sun in 1995.
In addition, through the first three quarters of fiscal 1996, Novell
spent $456 million to repurchase 33 million shares of stock in open
market transactions. These shares were then retired, enhancing the
value of shares held by investors.
Beyond this measure, over the last nine months Novell has:
* Refocused its business on its core network software strength;
* Refreshed its product lines across the board following accelerated
product development of ManageWise 2.1 (shipping since August);
IntranetWare and NetWare 4.11 (both began shipping on October 2); and
GroupWise 5, (due to ship in mid-October);
* Evolved the NetWare network operating system to IntranetWare, a
network solution for the rapidly expanding intranet and Internet
markets.
2Q. What does Novell have planed for future growth of the company?
To succeed as a technology company, Novell knows it must sustain
revenue growth. For fiscal 1997, our objective is to achieve
percentage revenue growth in the mid-teens over fiscal 1996.
Novell's third fiscal quarter 1996 results provide a baseline for
Novell's refocused network software business. The company's
objective is to grow revenue from the $365 million reported at the
end of that period.
Novell anticipates that as much as two thirds of its revenue next
year will come from new products that have been launched this fall.
In addition, in 1997 Novell anticipates gaining revenue from new
sources --network services software that runs on NT and UNIX as well
as on public data networks.
3Q. Why have you ignored so many of the investors e-mail. As acting
CEO of
OUR company don't you feel obligated to respond to the individual
investor.
There is a thread on the internet called Silicone Investor, it is
there
where the novell investors go to communicate with each other, are you
even
aware of this? Several investor have expressed concerns over your
failed
response to them.
Since being appointed president on August 29, Joe Marengi has had a
great many priorities and commitments to balance. We believe that
our investors largely understand that the most important action items
for him to focus on -- for the benefit of Novell customers, employees
and shareholders -- are turning around the company, making the
company more responsive to customers and leveraging Novell's
strengths to deliver revenue growth.
Joe has been speaking broadly with press, and intends to continue to
do so. As a public company this provides a most effective way for
Marengi and the company to meet their obligation to openly
disseminate information that relates to what we are trying to
accomplish. In particular, the hundreds of inches written about
Novell in computer industry trade press each week offers Investors an
opportunity to keep pace with ongoing commentary on Novell, its
products and business.
Although Joe may not be able to answer questions personally, he has
asked me and my staff to respond to investor inquiries. We are well
versed in Novell's strategic direction, market opportunities,
management priorities, and competitive issues, and will be able to
assist you by email, regular mail, or again, by telephone -- 800-317
3195, and press 5 when you hear the menu.
4Q. Why are you not countering the hype of NT?
In October, Novell launched a $20 million worldwide advertising
campaign to support the launch of our new products and intranet
solutions. It's the largest new product media budget in the
company's history and will support advertising in leading
publications, including Business Week, Financial Times, Fortune,
Forbes, Newsweek, Wired, Sports Illustrated and the Wall Street
Journal. It will also fund banner advertising and commercials in
more than 25 online media, such as America On Line, Netscape, CNN
Interactive, and Hot Wired.
Our objective is to reach beyond Novell's traditional decision maker
audience to target the full range of today's network purchasers and
influencers -- CEOs, COOs, CIOs, and other executives -- who are
increasingly involved in purchase decisions for network software and
services.
These campaigns are intended to significantly increase awareness of
Novell as the world's largest network software company and a major
Internet and intranet player. Novell will build on these efforts
with continuous advertising in fiscal 1997.
As to NT -- support for NT in network solutions is one of the key
points of value for Novell network software. Today, as has
traditionally been the case, the typical client on a Novell network
is a Microsoft client, whether DOS, Windows 3.1, Windows 95 or NT --
although Novell anticipates this will be less relevant in the future
as network browsers emerge as the universal network client,
irrespective of the underlying operating system.
This fall Novell intends to ship a new release of the NetWare client
for Windows NT that fully supports the Novell Directory Service and
embraces NT at the desktop. This advanced network client software
has been in open beta for two months.
Novell network services that support NT servers are important to
Novell customers. Novell's ManageWise software manages both NT
servers and IntranetWare servers; Novell's GroupWise runs on NT
servers as well as IntranetWare and Unix servers. In 1997 Novell
will bring Novell Directory Services and other network services to
both NT and Unix servers.
According to IDC, the market research firm, Novell IntranetWare and
NetWare server operating environments outsell Microsoft NT network
servers by more than two to one. As a general purpose operating
system similar to UNIX, NT has limitations providing network
services. Novell's products are specialized network platforms and
deliver significantly better network performance, security,
scalability and reliability.
5Q. What do you have planned for the 1 billion in cash?
Novell's strong cash position gives the company tremendous
flexibility. Joe views Novell's cash as one of the larger venture
capital pools in Silicon Valley. With many of the business issues of
the last year behind us, the cash will be an important factor in
investments we make in technologies that are synergistic with our
network software business.
6Q. Do you have the authority to talk to other companies about
mergers and
acquisitions?
Joe Marengi, as president of Novell, has full authority to represent
Novell in discussions with his counterparts in other companies. In
addition, questions of mergers and acquisitions would always involve
the Novell board of directors.
Mr. Marengi these are just some of my concers about Novell, I know
you are
in the eye of a hurricane right now, trying to stay focused, but I
would
appreciate it if you take the time to answer these questions.
Best of luck to you moving the NEW NOVELL foward, I am eagerly
anticipating
your reply.
Thank You
Scott Phillips
* Statements made under the Safe Harbor Reform Act of 1996 are based
on current expectations and actual results may differ materially due
to risks, uncertainties, and other factors. Additional information
covering factors that could cause actual results to differ materially
from projected statements can be found in Novell's 10K and 10Q
filings, as well as the annual report.
>>> End of Message >>
>>> Scott Phillips <sdphill@thor.pla-net.net> - 10/1/96 1:38 AM >>>
Dear Mr. Marengi,
I am a faithfull Novell investor, and have been for 2 years now. You
can
see why I am not very pleased. I have just a few questions for you
and
would appreciate a response as soon as possible.
1. What is actually being done to enhance shareholder value?
2. What does Novell have planed for future growth of the company?
3. Why have you ignored so many of the investors e-mail. As acting
CEO of
OUR company don't you feel obligated to respond to the individual
investor.
There is a thread on the internet called Silicone Investor, it is
there
where the novell investors go to communicate with each other, are you
even
aware of this? Several investor have expressed concerns over your
failed
responce to them.
4. Why are you not countering the hype of NT?
5. What do you have planned for the 1 billion in cash?
6. Do you have the authority to talk to other companies about
mergers and
aquisitions?
Mr. Marengi these are just some of my concers about Novell, I know
you are
in the eye of a hurricane right now, trying to stay focused, but I
would
appreciate it if you take the time to answer these questions.
Best of luck to you moving the NEW NOVELL foward, I am eagerly
anticipating
your reply.
Thank You
Scott Phillips
Stockholder
======================================================
I guess he was making the point that my messages were recieved by sending them back so for new commeres all 3 are there. If you have seen them befor I apoligize.
Still Bitter,
Scott
OUT WITH MARENGI!!!! |
