Market Digest Online -- the full story on INPR:
INPRISE CORP.: (INPR) $13 15/16 Up $2 7/8 and traded on the Nasdaq Stock Exchange... First recommended in the Whisper Stock section on November 30, 1999 at $9 7/16, we all watched this one double very quickly (within a matter of days) to the $20 level. It then made a quick 50% retracement at which time we recommended the stock again to Flash Alert subscribers. The stock traded excellent volume yesterday and we look for the uptrend to continue. This one is volatile, so don't get in unless you can stomach the volatility. There's little to no resistance back to the $20 level. Once again, here's the story.....
"If this game is all about earnings (and as we all know, the fundamental building blocks to drive share prices higher start with earnings and end with earnings), then Inprise Corp. currently has the rest of the Linux group beat badly." If Inprise is able to go forward from here with continued solid earnings growth of at least 30%+, we believe the stock has a shot at doubling or tripling from here within the next six to nine months. Here's some of the essential statistics for this company..... On the balance sheet sits about $70 million worth of real-estate. There's $180 million in cash which currently provides about $2 million to the bottom line (each quarter) in interest earnings. Inprise owns one of the best brand names in the industry. The company also has one of the most revered customer bases in the industry. INPR also owns some of the most coveted patents in the industry. These patents have the potential to generate in excess of $125 million in licensing fees over the next year if they actually ask for royalties from parties who have infringed. (Imagine if Oracle has to pay for data binding patent recently assigned??) Inprise has been losing money for some time on an operating basis, mainly due to bad management. On an operating basis, they have made some money, but not consistently. Because of the lack of consistency, the share price has languished.......until the recent "Linux" frenzy.
The company is now making it a number one priority to manage their assets. The fact that they have a huge amount of cash in the bank is a huge plus and if they are able to show investors that earnings can come in between 30%+ to 40% growth, this stock will really fly. Right now, Inprise has a big advantage over the rest of the pack, simply because they are making money while most others are not. The cost of sales, SG&A and others are all doing quite well. Cost of sales is going up. Inprise has about 8 products of note: JBuilder (Windows, Solaris, soon Linux); Delphi (Windows, soon Linux) C++Builder (Windows, Soon Linux); AppServer (Unix, NT); AppCenter; Visibroker (any platform); Interbase (any platform); JDataStore. The AppServer is one of the best technologies Inprise offers. The offering is about to be released including J2EE and Java Bean support, and will likely knock the socks off of the competition. With marketing, this could be a killer product. However, all the talk is centered around the company's sexiest product of all, Visibroker. Never in the history of computing has a shift as strategic as the one we see today been so far reaching. Everything connected to a network, communicating . . . somewhat intelligently . . . and Visibroker is the standard. It is widely integrated to other's technology, is integrated with INPR development tools, and is the fastest on the market. This technology could take INPR to the big league.
The biggest challenge for the company will be to ensure cash flow in order to compete effectively against the MSFT monopoly. In Linux, the market is made up by about 10 weak competitors, who will remain weak due to competition and free source code. The company who makes tools to solidify this market however is likely to be a big winner, because Enterprises need to be sure about the code going on the OS. Inprise already HAS the reputation (both MSFT and IBM are widely considered inferior in their ability to deliver development tools) INPR will sell boat loads of these tools. Finally, the AppServer is likely to be a winner due to the appliance market where performance, distribution and more are critical factors. CORBA will win for these types of applications over COM/DCOM. In Brisbane this week, over 400 Australian software developers will get a rare peek under the hood of Inprise's next generation of software tools. In the finale to Inprise's BorCon '99 conference, US officials unveiled a variety of high-tech projects the company is working on. These include the latest in rapid application development (RAD) tools, which can be used to create everything from Web stores to high-tech PC games. First on stage was the Java programming tool JBuilder 3, which has been reworked for Sun's Solaris operating system. Chief scientist in charge of the project Blake Stone demonstrated several features not seen before in JBuilder, including the ability to create Java tools for the Palm handheld computer. The Java produced by JBuilder can have its own Palm desktop icon and also supports the Graffiti handwriting system.
Inprise was also keen to update developers on its first RAD tool for Linux, dubbed Kylix. Although the software is only at the proof-of-concept stage, Inprise is already claiming major speed improvements over ordinary Windows-based compilers. "You can think of it as a Delphi or C++ builder for the Linux platform," said Inprise Linux chief Jason Williams. Inprise is initially planning to support Red Hat and Corel Linux. Williams says the company has been inundated with requests for new Linux software, including over 24,000 responses to a Linux related survey this year. He said that it was the largest response ever to a Borland/Inprise survey. Also on stage at the Australian conference was Inprise's AppCenter, which is being developed in Australia by a team of programmers in Sydney. The tool is designed to monitor and test Web-based applications, making sure transactions and other operations perform correctly. The Sydney team is currently working on a new version of AppCenter that will be capable of monitoring programs rented over the Web. That version is due for release in early 2000. Finally, Inprise evangelist David Intersimone took the stage to much applause. Intersimone unveiled C++ Builder 5. The new version has been updated for the Web with XML to display project information. Inprise has also added a feature called CodeGuard, which can automatically check program code for errors.... THE BOTTOM LINE: If Inprise is able to come through on the earnings front, this stock has an excellent chance at trading considerably higher. If you're a speculator, particularly with yesterday's big reversal, we like the Inprise January 12.5 call options (BLQAV) or the Inprise January 15 call options (BLQAC). The BLQAV's closed yesterday at $2 15/16 and the BLQAC's closed at $1 7/8.
NOW FOR THE UPDATE POSTED AT 8:30pm est 01/03/2000: Yesterday, Inprise announced that it is jumping to the forefront of the Linux database market by open-sourcing the beta version of InterBase 6, the new version of its SQL database. InterBase will be released in open-source form for multiple platforms, including Linux, Windows NT, and Solaris. ''Inprise is taking a leadership role in the Open-Source movement by releasing the beta version of InterBase 6 under an open-source license. We are taking this bold step because we believe every Linux distribution needs InterBase,'' said Dale Fuller, interim CEO and president of Inprise Corporation. ''By open-sourcing InterBase, we will be unleashing a world-class database for companies worldwide to develop and deploy business-critical, mobile computing, and Internet-based applications for multiple platforms, including Linux, Solaris, and Windows NT. This is an amazing opportunity for Inprise, its customers and the Open-Source community.'' In the opinion of MDO, this move will be huge in the wireless arena! First the company is Linux, then B2B and now wireless!! And it was obviously preceived as a major, major development in after hours trading, as Inprise was trading as high as $18 a share at the time of this update at 8:30pm est. With more than 3 million shares short, we see this stock making a major run to the upside. If you're in, enjoy the ride. If you're not long, jump in on any pullback - if we get one. Looks like a major gap up at the open of trading on Tuesday!
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