Sometimes, investors have the right to attack Novell. But this time around, at least one financial analyst firm seems to be beating up on Novell for a rather foolish reason. Here's the scoop, from The VAR Guy. First, a little background. The VAR Guy does not give investment advice. Nor is his favoring Novell over other Linux distribution providers.

The VAR Guy

April 7, 2009

1 Min Read
Defending Novell On Wall Street

Novell SUSE Linux on Wall StreetSometimes, investors have the right to attack Novell. But this time around, at least one financial analyst firm seems to be beating up on Novell for a rather foolish reason. Here’s the scoop, from The VAR Guy.

First, a little background. The VAR Guy does not give investment advice. Nor is his favoring Novell over other Linux distribution providers.

Instead, he’s merely pointing out a rather foolish fact: Jeffries analyst Katherine Egbert has downgraded Novell’s stock because Novell wants to use its cash to pursue acquisitions rather than dividending it back to share holders, according to Barron’s.

Let’s make sure The VAR Guy understands Egbert’s logic:

  • Technology company valuations continue to fall during the recession.

  • Novell needs to strengthen its position in the data center.

  • Many small start-ups will be looking for exit strategies during the recession.

  • Many of those start-ups are therefore willing to take lower offers than previously anticipated.

And Egbert is suggesting Novell pay dividends rather than make acquisitions? Frankly, Egbert’s logic doesn’t add up. When company valuations are falling fast, that’s when you comb the market for great buying opportunities.

Novell’s commitment to making targeted acquisitions is the right one.

The VAR Guy is updated multiple times daily. Don’t miss a single post. Subscribe to his newsletter, RSS feed, Twitter feed and Resource Center.

Read more about:

AgentsMSPsVARs/SIs
Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like