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Technology Stocks : Open Text

OTEX 33.67

-1.8%

Nov 14 9:30 AM EST

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To: Gary105 who wrote (307)	2/1/1997 5:37:00 PM
From: White Shoes	of 1195

Gary, for what it is worth, I think I have a 'feel' for this company's management and I would not describe them as the 'fat and happy' types. You won't hear them say it, but I think earnings down the road will be ahead of expectations precisely because they have no intention of letting costs run away forever. They are trying to nail down as much business as they can RIGHT NOW because they are in a race to get through the door...and have devoted one hell of a lot of resources to sales. Management is respectable and smart and conservative and plays it by the book and I was told as much prior to the IPO by some local people including a stockbroker I trust (as a personal friend) who couldn't care less about technology companies. I do think trust in management is paramount and I hope you get some reassuring comments from whatever funds are investing heavily in Open Text. Perhaps by downgrading estimates the analysts are sending them a signal that they too had trust in the company and are going to be watching closely to see that they don't spend their way out of this trust. I think over time those earnings estimates will prove to be way off to the conservative side, but that's OK, the analysts are sending a GENTLE signal to the company. My regard for this company has only been enhanced by the way in which they recognized the weakness of the 'search engine ad revenue' business model and then turned on a dime. This weakness has still not been acknowledged by high flyers Yahoo, Excite, and the new kids on that block. Open Text has gone in a different direction...away from publicity and hype, but towards signing up customers and increasing revenues. I do hope that management will continue to make such sound decisions over the years; perhaps one of them will involve re-entering the search engine fray when conditions are more favourable to the company. None of what I have said here is based on any extensive research and I would be happy to hear what anyone else finds out.

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