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

To: ToySoldier who wrote (24654)	12/8/1998 11:39:00 AM
From: Spartex	Respond to of 42771

IBM , AT&T shares rise on pact Tuesday December 8, 11:16 am EST NEW YORK, Dec 8 (Reuters) - Shares of AT&T Corp. and International Business Machines Corp. rose Tuesday morning on news that AT&T would buy IBM's Global Network corporate networking business for $5 billion. AT&T shares gained 2-11/16 to 67-7/16 and were the second most active issue on the New York Stock Exchange. IBM shares climbed 1-9/16 to 168-3/4. Under the pact, IBM is granting AT&T a five-year, $5 billion contract to handle a large part of its networking needs. AT&T in turn is outsourcing to IBM some of its applications processing and data management work. Wall Street traders and analysts applauded the deal, saying it bolsters AT&T's Internet and e-commerce business. Peter Cardillo, director of research at Westfalia Investments, said the deal meant ''a greater exposure to the global Internet business'' for AT&T. Brown Brothers Harriman & Co. analyst William Milton saw the deal as a wash financially for IBM, with the cash injection counterbalanced by lost service revenues. But he said the pact lifts a rather large burden from IBM's shoulders. ''It frees IBM from the burden of maintaining and continually updating the hardware portion of the global network, which is something that is much more suitable for AT&T -- that's AT&T's core business,'' he said. AT&T said the outsourcing exchange could add $2.5 billion to its revenues in the first full year of operation, and would add to earnings after the first year. IBM's Global Solutions provides a variety of networking services for clients, including setting up and managing internal computer networks and providing external Internet connections. The unit's Internet network is one of the most far-reaching in the world, according to industry analysts. biz.yahoo.com Any implications here for NOVL and NDS? Sure frees up more cash for IBM to look for other software acquisitions. Regards, QuadK