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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: TTOSBT who wrote (21101)	3/14/1998 12:37:00 PM
From: E_K_S	Respond to of 42771

Hi TTOSBT - You may be right but I first suggest you read Mr. Buffet's 1997 annual letter to shareholders. Pay particular attention to his views on how important the management is for all the companies he invests in. There were two main points I got from his shareholder's letter: (1) on balance large company mergers are usually not profitable especially when paid for with company stock (his best buys have been obtained using cash) and (2) Once an excellent management team is in place let them manage and build the company. If successful, over time growth and earnings will eventually be reflected in the stock price. He sites his error with US Air. Only until he and his partner resigned from the BOD did the company show a stellar performance in earnings and price (now at $73..he purchased his position when the price was around $4/share!). berkshirehathaway.com Now, the question this investor must answer is... Does Novell have a management (and BOD) Mr. Buffet would find acceptable? The short answer.. (IMO) Not Yet! EKS

To: TTOSBT who wrote (21101)	3/14/1998 2:23:00 PM
From: Steve Fancy	Respond to of 42771

Nobody, The stock is actually down about 7% from it's recent high of 11 1/8 or so. Novell tends to react slowly to news (other than buyout rumors)...these lawsuits will likely have significant affect before it's all done and over. As Mark stated last night, looks like they finally found a use for that 1 billion. Could be a buyer, but my guess, too soon yet. I wouldn't think Novell will sell unless Netware 5.0 does not produce the returns they're expecting, and I wouldn't think to many companies would be buyers with significant lawsuits in the early stages. I am a long term bull (I guess) the company will be forced to sell if nothing else and there is certainly a ton of potential here. $16 in the next couple of months...all I can say to that is, good luck. Internet leader by the end of '98, well guess that depends on your definition of an internet leader, but seems awfully unlikely to me. Good luck sf

To: TTOSBT who wrote (21101)	3/14/1998 5:47:00 PM
From: Don Earl	Read Replies (2) \| Respond to of 42771

Hi TTOSBT, Well.....25 cents doesn't seem like much. Not even enough to ride the bus. Right? On a $10 stock that's a loss of 2.5%, about the same as the Dow dropping 215 points. Novell is not for sale. Every company that has been mentioned in all the rumors for the year that I have been following the stock have said they don't want it. Hopes of a buy out are the last line of defense to justify a bad investment. People that invest in companies with a history of revenue growth don't even think about it. There were a lot of block trades going across at the bid a few months ago when it broke below $7. Does that mean that all the "smart money" bailed out just before a 50% rise in price? Novell spends $1-$2 million a year on legal fees in the normal course of business. I doubt the recent law suits will put much additional drain on those expenses. Any rewards paid would be years in the future. The danger of the suits lies in the risk of an outside audit and the impact it would have on the stock price if Novell were forced to restate earnings. That 3 Com is being sued by this law firm and had to restate earnings as the result of a federal audit, should offer some clues. It looks like the suit against 3 Com was filed on Dec 5 and the restatement of earnings came out on March 5. Three months. 3 Coms numbers didn't look that bad. I don't think Novell will come out that easy. While on the topic of bears, it might be worth a look at what the company insiders have been doing with NOVL. Novells lawyer, treasurer, and CFO have not only NOT been participating in employee stock purchasing programs, they have been selling whatever stock they already owned. Following insider trading patterns can be at least as tricky as trying to figure out block trades, but right or wrong I tend to put more weight on the trading patterns of a companies financial officers than any other insider. If the Dow dropped 650 points in a week people would be concerned. In terms of percentage movement that's what you're looking at for NOVL since news of the law suit and the "resignation" of the CFO hit the market. NOVL generally tends to move slow and the news is too fresh to be fully reflected in the stock price. Regards, Don