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

To: fb who wrote (24755)	12/22/1998 5:27:00 PM
From: DavidD	Respond to of 42771

IMHO I think the reason the share price has remianed so stable in the past two weeks regardless of volatility in the NASDAQ is due to the fact that the big institutions are waiting for some type of "confirmation" that the turnaround is still in motion. Bad news could kill the stock now.

To: fb who wrote (24755)	12/22/1998 6:26:00 PM
From: PJ Strifas	Read Replies (1) \| Respond to of 42771

There are some good reasons for them going to $100 per share but I don't see that happening with the next 12 months. First off, the report for the next fiscal year is under around the $0.50 mark. I suspect that will bring the stock nearer to the $30 range. For Novell to hit $100 in the next year, they would need a huge boost in revenues so one of the following needs to occur: a) a MERGER with a major player (Sun, IBM, Lucent come to mind even if there are good arguments against this happening). b) Windows 2000 does NOT come close to its hype and all the momentum it's gathered in the last 2 years suddenly falls flat + Novell's new strategy to gain support from upper management instead of IT succeeds. c) the DOJ supports a remedy for it's case to break up MSFT into seperate divisions with "chinese walls" between them (applications/OSes/consumer software). d) Java. While the first one would be a great boost to Novell depending on who they make their bed with, I'm not holding my breath for this as a saving grace. I feel that Novell is better suited working from their own NDS-aware product line expanding it and getting more developers onboard. This will grow revenues much faster and longer lasting. The second possibility could well come true. That bundled with news of the cost of running NT servers finally getting to the mainstream press could reverse things for short term sales. For instance, "Giga Information Systems found that upgrading from NetWare 4 to NT 4 would cost 2 to 3 times as much as upgrading to NetWare 5" ( Dave Kearns, Network World, Dec 14, 1998) When compared with NetWare servers, NT does not have any technical advantage that would make this added cost worthwhile. This is popularly known among the "techies" but not the upper management who make the actual decisions on what to buy and how much. Novell plans to change that in their approach to marketing and sales. The DOJ is a wild card I'm placing here because everything they do or say will affect everyone in the industry. If they manage to break MSFT's stronghold on OEMs and resellers, Novell will gain an edge in system sales (with preloaded OSs on servers). OEMs will be free to aggressively sell the best product to their clients. I added Java to my list because it is part of the wave of the future for Novell. There has been talk and whitepapers to point to Novell going away from it's tried and true NLM structure to a pure Java server environment. Once Java becomes mature enough to code the reliability, scalability and performance of the current NetWare software into a pure Java platform, you'll see a change. And that change will mark a new era in networking. Then again, I'm praying for Novell to hit $100 but I see that happening easier in 2001 than in 1999. Then again, with the internet crazy on Wall Street, I could prove wrong :) Peter J Strifas