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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Paul Fiondella who wrote (28016)	9/8/1999 2:02:00 PM
From: Spartex	Read Replies (3) \| Respond to of 42771

<<If the option says you get 60,000 shares at $7 directly from Novell which issues the stock to you and then you sell those 60,000 shares at $26, you are definitely selling real stock. Novell gets $7 and you get the rest. This is precisely how Novell plans to use up its 1 billion.>> This is not completely true (see last quarterly press release below). Remember, NOVL is using their net cash from operations to do a couple of things: acquire some small companies, do some venture capital investments, and most substantially the share buy back program. The company has already spent $448 million on the first buy back program to retire about 35 million shares, while their $1 billion of cash and short terms investments has only dropped by 30-50 million (I'm est. here). If Novell's revenue continues to grow well, I believe the recently approved share buy back program of $500 million dollars can be implemented without too much affect (reduction) on their current $992 million stash. It appears to me that they want to keep some of that money for marketing/advertising costs, as well as other strategic acquisitions/venture projects. Lord knows that RHAT has been a BIG HIT for Novell as one example of a venture investment going public and up over 8+ fold. +++++++++++++++++++++++++++++++++++++++++++++ On the balance sheet, cash and short-term investments were $992 million at the end of the third quarter, compared with $1.007 billion at the October 1998 fiscal year-end. Net cash from operations contributed $87 million in the quarter, offset by expenditures for share repurchase, fixed assets and two small acquisitions: Ukiah Software and Netoria. Days sales outstanding of trade receivables declined to 65 days, down from 75 days at the end of fiscal 1998. On June 23, the company acquired Ukiah Software, a developer of directory-compatible, policy-based network management software that automates the management of traffic and quality-of-service across networks. On May 18, Novell acquired Netoria, a developer of software that simplifies the use of directory services by network users and administrators. The cost of Novell's acquisitions in the quarter, the company's first since 1994, were not disclosed. During the quarter, the company spent $57 million to repurchase 4 million shares of Novell common stock. On June 5, 1998, Novell's Board of Directors authorized the company to repurchase up to 10 percent, or approximately 35 million shares, of Novell common stock over 12 months. To date, the company has spent $448 million to purchase and retire 34,550,000 shares of common stock that were authorized for repurchase. Recent Board Actions On July 26, 1999, Novell's Board of Directors authorized up to $500 million for a share repurchase program through October 31, 2000, with the intent of offsetting the impact of exercised stock options and the effect of the Treasury method of accounting for outstanding stock options. The objective of the new plan is to maintain a fairly constant weighted average share count of approximately 350 million shares. Novell also disclosed today that Novell's Board of Directors increased funding for two Novell programs that participate in venture capital activities. After this action, total authorized funds for venture capital investments reached $170 million. An authorization for the Novell Ventures Fund was increased by $30 million to bring the total allocation since inception to $80 million. Through Novell Ventures, the company makes investments in private firms that complement Novell's directory strategy or have the potential of benefiting from the effects of expanding networks. In addition, the Board increased by $45 million the authorized investment for an internally managed VC Fund that invests in venture pools managed by traditional venture capital firms. Since inception, the VC Fund has received a total allocation of $90 million. biz.yahoo.com