Just out! I watched the bottom fall away just as this came out.
Class Action Suit Filed Against Novell, Inc. and Its Officers, Directors and Its Outside Auditor Alleging Misrepresentations and False Financial Statements
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SAN DIEGO (Feb. 27) BUSINESS WIRE -Feb. 27, 1998--A class action has
been commenced in the United States District Court for the Northern
District of California on behalf of purchasers of Novell, Inc.
("Novell") common stock during the period Nov. 1, 1996 to April 22,
1997 (the "Class Period"). The complaint charges Novell and certain of
its officers, directors and its outside auditor, Ernst & Young LLP with
violations of the Securities Exchange Act of 1934. Novell sells
computer software products for use by business enterprises. The
complaint alleges that in order to conceal the serious problems with
Novell's business and thus support and artificially inflate Novell's
stock price, Novell's insiders concealed the true nature and extent of
the problems which were adversely impacting Novell's business and
affirmatively misrepresented the success and state of demand for
Novell's products and its prospects for revenue and EPS growth during
F97.
The complaint further alleges that defendants manipulated and inflated
Novell's reported EPS for the 4thQ of F96, ended Oct. 26, 1996, and the
1stQ of F97, ended Jan. 31, 1997, making Novell appear profitable when,
in fact, it had suffered losses.
In Nov. 1996, Novell told investors of the "broad market acceptance
of" and "strong market demand" for Novell's new products which it
represented "greatly impacted fourth quarter growth." As a result of
these allegedly false statements, assurances, forecasts and inflated
financial results, Novell's stock increased to $13 per share in Feb.
1997 from $8-3/4 per share on Oct. 31, 1997, a 33% increase in just
three months.
On March 18, 1997, Novell announced that Eric Schmidt had been named
Chairman of Novell's Board and its Chief Executive Officer. Then, on
April 22, 1997, just weeks after Schmidt joined Novell, Novell revealed
that its 2ndQ F97 results, the quarter to end April 30, 1997, would be
much worse than earlier forecast, with revenues of only about $300
million, a sharp decline from 1stQ F97 revenues of $375 million, due to
poor sales to Novell's OEMs and distributors of boxed software
products.
Upon this revelation, which one analyst called "brutal" and "not
pretty," on April 23, 1997, Novell's stock fell to $7, on huge volume
of 16.6 million shares, taking it back below where it was at the
beginning of the Class Period.
Plaintiff seeks to recover damages on behalf of all purchasers of
Novell common stock during the Class Period (the "Class"). He is
represented by two law firms, Milberg Weiss Bershad Hynes & Lerach LLP
and Kaplan, Kilsheimer & Fox, LLP, who have expertise in prosecuting
investor class actions and extensive experience in actions involving
financial fraud.
Milberg Weiss has been actively engaged in commercial litigation,
emphasizing securities and antitrust class actions, for more than 20
years. The firm has offices in New York, San Diego, San Francisco and
Los Angeles and is active in major litigation pending in federal and
state courts throughout the United States. The firm's reputation for
excellence has been recognized on repeated occasions by courts which
have appointed the firm to major positions in complex multi-district or
consolidated litigations.
Milberg Weiss has taken a lead role in numerous important actions on
behalf of defrauded investors, and has been responsible for a number of
outstanding recoveries which, in the aggregate, total approximately $2
billion. Visit the firm's website at milberg.com .
If you are a member of the Class described above, you may, no later
than 60 days from today, move the Court to serve as lead plaintiff of
the Class, if you so choose. In order to serve as lead plaintiff,
however, you must meet certain legal requirements. If you wish to
discuss this action or have any questions concerning this notice or
your rights or interests, please contact plaintiff's counsel, William
Lerach, Alan Schulman or Darren Robbins of Milberg Weiss at
800/449-4900 or via e-mail at wsl@mwbhl.com or Robert Kaplan, Fred Fox
or Adrienne Valencia of Kaplan Kilsheimer at 800/290-1952 or
212/687-1980 or via email at kkfoxlaw@aol.com.
-0- BT/sf* gdr/sf
CONTACT: Milberg Weiss
William Lerach/Alan Schulman or Darren Robbins,
800/449-4900
e-mail: wsl@mwbhl.com
KEYWORD: CALIFORNIA
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