Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : BORL: Time to BUY! -- Ignore unavailable to you. Want to Upgrade?

To: Bipin Prasad who wrote (7504)	11/18/1997 4:01:00 PM
From: Anthony Wong	Respond to of 10836

DJ article - Visigenic Rise Called 'Vote of Confidence' by By Janet Morrissey smartmoney.com NEW YORK (Dow Jones)--Borland International Inc.'s (BORL) decision Tuesday to acquire Visigenic Software Inc. (VSGN) sparked heavy trading and a 15% drop in Borland's stock price, apparently because short-term investors fretted over the dilutive effects of the purchase over the first two quarters. At the Comdex trade show in Las Vegas, Borland unveiled plans to buy Visigenic, a computer middleware provider, in a stock swap that will see Borland issue 12.5 million shares. The transaction will boost Borland's total outstanding shares to about 54 million shares. Borland Chief Financial Officer Kathy Fisher said the Scotts Valley, Calif., company will likely take a restructuring charge of $10 million to $12 million, or about 22 cents a share, in the first quarter of 1998 in connection with the transaction. Borland, which is now in its third fiscal quarter, will switch to a calendar year in January. Fisher concedes the newly issued shares will likely be dilutive to earnings per share for the first two quarters of 1998. However, she projects the dilutive effect will be short-lived and that it will be neutral to earnings per share for full year 1998. "I'm not surprised, and I'm not worried," said Fisher, when questioned about the stock slide. She said that short-term investors who don't understand the transaction are selling off. "The long-term players and investors who know the company and its management and who understand where the company is heading" are not pulling out, Fisher said. "This is a momentary movement." Borland stock recently changed hands at 10 1/4, off 1 3/4, or 14.6%, on Nasdaq volume of 1.8 million, compared with average daily volume of 547,500. Visigenic Software's stock jumped 43% in Tuesday afternoon trading. The shares recently changed hands at 7 1/2, up 2 1/4, on volume of 1.5 million, compared with average daily volume of 102,000. "This is a stock transaction, and buying Visigenic stock is a vote of confidence in Borland," Fisher reasoned. Analyst Wesley Golby from Van Kasper & Co. concurred, adding that the acquisition is essential for Borland's long-term growth. Visigenic Buy Seen Necessary For Growth With Visigenic Software announcing it would miss analysts' estimates for its fiscal second quarter and report a loss of between 24 cents and 26 cents a share, Van Kasper's Golby said, some investors may interpret the acquisition as the purchase of a money-losing company. But the analyst said Visigenic offers the middleware component that Borland needs to enter the high-end marketplace. In the past, Borland had licensed Visigenic's Common Object Request Broker technology for integrating software environments. "Middleware acts as the glue for developing systems that can run across different platforms," Golby said. By owning the technology, Borland will be able to offer a complete application development tool platform that will allow customers to develop and manage applications on multiple platforms, including Windows, Unix, AS/400 and MVS, he said, and it will allow Borland to break new ground in the enterprise market. The addition of Visigenic's founder, Roger Sippl, to the Borland team will also boost Borland's image in the industry, market watchers said. Golby describes Sippl, who previously founded Informix Corp. (IFMXE) and Vantive Corp. (VNTV), as a "visionary" and "industry pioneer" who often detects trends in the market before the masses. Fisher, Borland's financial chief, expects some revenue growth in 1998 and 20% in 1999. "(The acquisition) is an opportunity to bring complementary products together and to expand the product line, the customer base and the bottom line," Fisher said.