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Technology Stocks : Citrix Systems (CTXS) -- Ignore unavailable to you. Want to Upgrade?

To: SI Dave who wrote (9009)	2/20/2004 2:40:06 PM
From: SI Dave	Respond to of 9068

Does anyone else hear the echo in here? Citrix announced redemption of all their convertible debt after the close yesterday. It should have been expected given their large and growing cash balance. I consider it to be bullish for two reasons: 1) It reduces the likelihood that Citrix will do any more major or expensive (dilutive) acquisitions in the near term; and 2) The convertibles are currently out of the money. Management's decision to buy back now implies their expectation that share price will rise above the convertible strike price. However, the company has executed various share repurchase programs rather poorly in the past, especially when Cunningham was CFO. There is less chance of screwing up this repurchase, since they aren't paying a premium for the redemption. After the buy back, the company will have no debt, plenty of cash (~$400mm after ExpertCity acquisition), positive cash flow (>$200mm annually), and growing deferred revenues. Earnings visibility was improving each quarter... until they announed the ExpCity acquisition, that is. IMO, it's unlikely CTXS will post a new 52-week high until they articulate their strategy for integrating ExpertCity and significantly increase its installed base by leveraging with MetaFrame, or vice versa.