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Technology Stocks : Corel Corp. -- Ignore unavailable to you. Want to Upgrade?

To: hdl who wrote (9587)	9/19/2000 7:45:12 PM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 9798

the transaction may be evidence an institution believes corel has a chance. Not this sort of transaction -- this is as different from a long term investment in a company as is the difference between a prostitute and a bride. So long as everyone keeps the differences straight, fewer people get hurt or misled. This financing is simply an investment company acting as a middleman to allow the Company to sell stock to the public in order to raise cash. The investment company does this to make a short term, low risk profit, by selling the stock that passes through their hands for more than they paid for it. Because of the way the deal is structured, the investment company is able to do this (buy low sell high) with much less risk than you or I could (basically, it's a no-brainer slam dunk). A fair question of course is whether existing shareholders are being well served by having their Company sell stock at a discount, but asking that sort of question could really open up a can of worms... ;-) the transaction may provide corel with money which may give it a chance I agree. It will provide Corel with money, and perhaps they might save the company with this money. They're certainly quite likely to go bankrupt without it. However I also think that there is a pretty good chance they'll still lose the company even with this financing. It does however give them more breathing room (or rope, depending on your perspective ;-) wordperfect is a decent wordprocessor. it may be worth something I think it's OK too, I use it (the free Linux version). It's certainly worth something, the question is how much, and to whom? I attempted to estimate its value three or four months back. I think I came up with $25-$100 million USD, depending on how generous my assumptions were (I treated it as a wasting cash flow stream). The problem of course is that Corel's stock market value today is $270M USD, so even adding some more value for CorelDraw and a tiny bit more for their Linux stuff, it's hard (for me anyway) to avoid the conclusion that CORL is, at the very least, overvalued. Personally, I think it's worse than overvalued, I think that they have a no-win situation on their hands, they have gone too far downhill, and they are going to lose the company on this one. Bankruptcy, liquidation or reorganization --- one way or another, today's common shares are going to end up either essentially worthless or totally worthless (IMHO). Look at their sales of their various product lines today, look at where they have been in the past, look at their past plans strategies and results, look at their present outlook and plans, and see if you can make a sensible case for them being anything other than a wasting asset cash cow -- I've really tried hard, and I can't make a case other than that. Please, please please show me that I'm wrong -- at the very least I'll cover my short and save myself some money, or if the case is strong enough I'll even go long. But you'll have to make a good sound businesslike argument to persuade me... - Daniel