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

To: ToySoldier who wrote (28431)	10/5/1999 1:22:00 AM
From: DJBEINO	Respond to of 42771

Novell Falls on Concern About Executive Departure Provo, Utah, Oct. 4 (Bloomberg) -- Novell Inc. shares fell 7.2 percent after a key executive resigned from the No. 2 maker of computer-network software and rival Microsoft Corp. said it's on track to release competing software this year. Novell fell 1 11/32 to 17 11/32 in trading of 19.5 million shares, making it the third-most active U.S. stock. The Provo, Utah, company said late Friday that Senior Vice President Christopher Stone, a key aide to Chairman Eric Schmidt, is leaving to form an Internet startup called Network Decisions. Stone's resignation heightened investor concern that Novell may lose business to Microsoft, the world's largest software maker, which is set to release its Windows 2000 computer operating system by year end. Microsoft's update includes Active Directory, a competitor to Novell's office computer-management software. ''Chris Stone leaving spooks people, because he's the one who's always presenting the company's story,'' said Martin Pyykkonen, a CIBC Oppenheimer analyst who rates Novell a ''strong buy.'' ''Now there's this whole psychological factor -- here comes Microsoft.'' Microsoft said today that it's giving its latest public test version of Windows 2000 to customers, developers and analysts and is beginning a 40-city tour to demonstrate the product. Company executives, including President Steven Ballmer, haven't set a final release date for Windows 2000. Shares Sliding Novell shares have dropped almost 17 percent in the past week, and more than 25 percent in the past month on concern that Windows will take business away from Novell's directory products. Some analysts say Microsoft won't immediately be able to lure large numbers of customers away from Novell. ''Novell has a very, very large installed base of customers, and they have a war chest of products that are very strong,'' said Paul Dravis, a Banc of America Securities analyst who has a ''buy'' rating on Novell. ''The challenge is that they are very technology and product oriented, and their marketing can be stronger.'' Stone was seen as a key executive promoting Novell products and developing partnerships with other computer companies that would help promote and sell Novell's products, analysts said. ''Chris (Stone) has been very good at articulating Novell's story, and they need some guys at Novell who are out there banging the table,'' Dravis said. ''Although his title wasn't marketing, he had a strong presence in that area.'' Reviving Novell Stone joined Novell in August 1997 from software-development organization Object Management Group, one of the first hires Schmidt made after taking the helm at Novell that April. Stone and Schmidt have been credited with helping revive Novell from a string of losses two years ago. In the quarter before Stone joined, Novell reported a loss of $122 million, including a charge. In the most recent quarter, Novell's net income almost doubled to $49.3 million from a year earlier. ''They're losing a guy who made a significant contribution over the last two years,'' said Stephen Dube, a Wasserstein Perella Securities analyst with a ''strong buy'' on Novell. ''Stone did a very notable job in a time when Novell was in a struggling period.''