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: Pruguy who wrote (24545)	11/26/1998 1:06:00 PM
From: dwight vickers	Read Replies (1) of 42771

If stock buybacks are only to keep up with employee option exercise, I can think of several reasons for that to be bad. It shifts money that should be an operating expense, namely salaries, to "profit", and paints a potentially misleading picture. Almost like reporting profits one year and taking one time writeoffs the next year. Or buying a company and immediately writing off costs (primarily R&D from what I've read) so that earnings look better going forward. If NOVL is creating cash only to pay for options, it isn't really creating shareholder wealth. It is being done all over the tech landscape in particular, and I've seen reports highly critical of the practice. As long as the share prices are rising, no one bitches. But it's all about building wealth, after all. And potential dilution of that wealth. Maybe the picture will look better as we go forward. From all the recent posts, it's obviously a complicated situation. Dwight

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