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: EPS who wrote (25470)	2/16/1999 10:05:00 PM
From: E_K_S	Read Replies (3) of 42771

Hi Victor - I still think you are reaching for unproven revenue growth. Both Giacommi and Fiondella see only a 19% increase in total revenues. Remember, we are coming off a low bottom base in NetWare sales and continued 20% growth in NetWare is not a given. In fact I believe future NetWare sales growth will be directly related to the current client base using (and migrating to) the NDS directory features AND other BorderManager/ZenWorks... products. In other words, the client (and new customers) must install the basic NetWare OS first to eventually incorporate all these other new Novell products! Novell really has no other "big time" product that does not utilize NetWare...no new product that stands alone. Ask Fiondella, I am sure he will agree. Novell is still dependant on NetWare sales (and upgrades)for their growth. Until Novell can release a stand alone product, overall product sales growth is limited. As Sunw develops Jini and Java applications and release their new Solaris OS, it is quite possible that a NetWare OS will be limited in it's value added functions to the network. Why couldn't a Jini or Java application provide the necessary security and Network directory functions that a Novell NDS provides? Couldn't a Sunw, LU or CSCO utilize the NDS standards without the NetWare OS? If so, perhaps Novell could obtain a "small" NDS license fee but ...what happens to all those NetWare "full price" license fees? Just more food for thought as technology is always changing. EKS P.S. Dodn't look to Novell to bring their outstanding shares down too fast. They have been buying down their shares over the last three years and are still at over 350 million shares outstanding. Exactly where they were three years ago. Perhaps it has something to do with the way they repriced all those employee options. P.S.S. I am still bullish on Novell, their management and their board. However, IMO they are more than fairly valued at current levels and I continue to hold selling covered calls. Maybe when they begin to earn more that $1.00 per share, I will get more excited.

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