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

To: EPS who wrote (22248)	5/23/1998 1:21:00 PM
From: Elmo Gregory	Read Replies (1) \| Respond to of 42771

Hi Victor - Novonyx joint venture is still alive: I never quite understood what went wrong in the joint venture Novonix and why the whole collaboration theme was shelved. On 27 Jan, 1998 Novell and Netscape jointly announced a restructuring of their joint subsidiary Novonyx, which now continues as a research & development, and product management focused venture between Novell and Netscape to deliver the Netscape SuiteSpot servers on the NetWare platform. These products will enhance NetWare and strengthen NetWare's position as the best Internet platform available. All marketing, sales, operations, support, and general administrative functions are now performed directly by Novell and the same web contents can be referenced at the Netscape Servers for NetWare site located at Novell's main web site. novell.com novonyx.com Regards, Elmo

To: EPS who wrote (22248)	5/23/1998 1:44:00 PM
From: E_K_S	Read Replies (1) \| Respond to of 42771

Hi Victor - When I was accumulating Novell shares the PE was between 10-12. At that time the street was estimating between $0.90 - $1.09 earnings for FY 1997. The company (IMO) really is not significantly different now in both focus, customer base, products and management (except for CEO Schmidt). Since 1996, the "E" has significantly gone south due to (1) product revenue "negative" growth, (2) out of control expenses, (3) missed marketing opportunities and (4) lack of focus on their business plan to grow their customer base. There have been some positives however. Management has reduced the G&A expenses, consolidated some facilities, terminated some developmental R&D projects, and completed down sizing several employee positions. IMO it is still not enough. With 350 million shares outstanding, it is very difficult to grow the relative earnings with decreasing revenues. The additional revenue streams generated from new products is not enough to offset the declining sales from their Netware cash cow. Investors will pay a price multiple equal to or greater than the (revenue) growth rate of the company. The growth in revenue is just not there now and this investor has a very difficult time seeing where it will come from in the future (especially with the legacy Netware product). Therefore, the options left for management are to (1) reduce operating expenses, (2) reduce the total outstanding shares (maybe a reverse split should be explored), (3) develop new predictable revenue streams (I suggested to management to look at generating "service" revenues by establishing annual maintenance and consulting contracts for designing, deploying, and maintaining customer enterprise systems), and (4) explore a merger that will allow the combined companies to maximize revenue growth by entering new markets that offer the potential to develop a new "Cash Cow" (like the legacy Netware product). The obvious near term solution is to continue the down size plan similar to what Mr. Reynolds is now doing for Sunbeam. With a focused management team and an aggressive business plan to exploit the Internet boom, a well selected merger partner might accomplish a "rebirth" for this company. Such new opportunities could include E-Commerce software/hardware business solutions, off site (remote) enterprise system maintenance services, business and home cable modem networking control services (ie. remote exchange services like monitoring and billing utility usage, data warehousing and delivering digital information ie."push technology" such as DVD movies, CD's etc.), and many other new emerging technologies. I guess in summary, I just do not see the vision from our management that is possible utilizing these new and unexplored Networking and Internet technologies. I am still hopeful though..... EKS