Big K, Couldn't agree with you more on "market penetration." However, vision and cash are required to create enthusiasm for the new releases and lure customers away from Microsoft, Adobe and others. In the past, Corel has been short on both.
As to cash, I expect that there is plenty of excess among the "Ottawacko's" at Corel. (Expression from the article posted by the assiduous "Reader.") I don't believe cuts occurred in Ottawa at the time of the Orem separation. Healthy lay-offs now would provide cash that could be used to gain market penetration, which would then lead to growth . . . and profits . . . and price appreciation for shareholders.
As to vision, does Corel have the leadership necessary to engineer effective marketing campaigns to motivate customers to buy?
Corel has truly fine products, but in the era of increased competition, potential customers must have a reason to "buy Corel." Management has relied too heavily on low prices to move product. If people perceive that Corel's products are more desirable, they will want the "best."
Finally, with past performance as a guide, Corel is more likely to post a two or three million-dollar loss as opposed to a profit. A huge demand for the new releases "out-of-the-gate" would be required to produce $85 M in revenue for Q2. If this phenomenon does occur, and can be repeated in Q3 and Q4, demand for shares of COS/COSFF could take the price to "$20.00 in 2000."
Up, Up and Away!
Scott |
