Monday March 8 5:09 PM ET Novell Shares Surge After Report Of Compaq Talks
CHICAGO (Reuters) - Shares of Novell Inc. (Nasdaq:NOVL - news) surged 15 percent after a published report said the software maker was rumored to be in ''deep discussions'' with Compaq Computer Corp. (NYSE:CPQ - news) to develop new products as corporate networks grow more complicated.
Under such a partnership, the world's largest maker of personal computers and Novell, a leading maker of network management software, would develop products that give organizations the ability to store local versions of Web sites on their office networks, eliminating the need to repeatedly download the information from the Internet.
Novell stock was up $3.31 at $23.44 on the Nasdaq after the report appeared in Barron's over the weekend. It was the third most actively traded issue on that exchange. The stock has more than doubled in price since October.
''Sentiment is definitely bullish,'' said one options trader, referring to Novell.
Shares of Compaq were up 12.5 cents at $34.38 in trading on the New York Stock Exchange.
Also, Novell announced Monday the latest version of its so-called enterprise directory targeted at high-end customers. Novell Directory Service v8 enables customers better manage and track all the users on a corporate network.
The product faces competition in that market from rival Microsoft Corp. (Nasdaq:MSFT -news), which has its own Microsoft Active Directory. Even so, analysts said Novell's offering was far more robust and could be expanded to ever-larger systems more easily than Microsoft's.
According to market research firm International Data Corp., 80 percent of Fortune 1000 companies now using directory services to manage and secure their networks already rely on NDS. Revenue for directory services is forecast to reach $5 billion by 2000, according to IDC.
''NDS can now manage more than five times the number of users on the Internet today, making it an invaluable tool in helping our customers expand their business opportunities with the growth of the Internet,'' said Chris Stone, head of strategy and corporate development for
Novell, said in a statement.
NDS v8 is able store and manage millions more users, applications, network devices and data than competing directories and earlier versions of NDS, according to Roy, Utah-based Novell.
Novell and Compaq officials could not immediately be reached to comment on the Barron's report.
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