08.29.08

How Much Did Novell Fool Wall Street This Time Around?

Posted in Deception, Finance, GNU/Linux, Microsoft, Novell, Servers, SUN at 8:03 am by Dr. Roy Schestowitz

Net loss at $15 million, claims Novell

Novell may have already had financial trouble before. Then came the deal with Microsoft. In the previous fiscal quarter, Novell's financial issues were already impossible to hide, despite cooking its own books (Microsoft does this too by the way).

USS Towers - sinking

In more recent months, Novell began buying its own shares in order to keep up appearances just like Microsoft does [1, 2, 3, 4, 5, 6]. Yesterday’s financial figures, however, reveal that Novell is unable to keep this up. Novell reported bigger losses.

Here is the press release from Novell (also available from The Earth Times, which might improve future retention in case the former link breaks).

Market Watch summaries thusly: “Novell posts widened third-quarter loss”

Network World (IDG) covered this too.

Novell Thursday posted a net income loss of $15 million for its fiscal third quarter fueled by a charge related to its “auction-rate securities.”

Here is a reminder of the fact that Novell has already slashed its staff to reduce expenses. Apparently, this was not enough for a turnaround.

Novell Inc., the second-largest US seller of Linux software, reported a wider third-quarter loss because of a charge related to investments.

The net loss of $15.1 million, or 4 cents a share, compared with a loss of $3.68 million, or 1 cent, a year earlier, Waltham-based Novell said.

Novell slashed about 10 percent of its workforce last year, moved costly consulting tasks to partner companies, and started selling more products online and over the phone. The company blamed the third-quarter loss on a $15 million impairment charge related to its auction-rate securities.

Fox News had this report.

Novell Inc. (NOVL) posted a widened fiscal third-quarter loss, citing a $15 million charge related to auction-rate securities. Waltham, Mass.-based Novell said its net loss in the period ended in July grew to $15.1 million, or 4 cents a share, from $3.7 million, or a penny a share in the same period a year earlier.

A long-time Microsoft talking point, Ivy Lessner, annonces that “Novell’s Quarterly Loss Widens.”

Same tune in Associated Press, which does not permit quoting. The Microsoft-obedient New York Times may have cherry-picked a Reuters article, which spins this news positively.

Like a few others, Eric Savitz, of the Microsoft-obedient Barron’s, had his eyes on the forecasts before he finally reported without saying much. The effect on the stock was minor.

After hours, NOVL is unchanged at $6.01; the stock rose 10 cents in the regular session.

Street Insider has offered some coverage too.

Over at iTWire, just prior to Novell’s disclosure of these latest results, Sam Varghese predicted trouble for Novell. A company which becomes so dependent on Microsoft cannot be in a healthy state of affairs.

The extension of the deal indicates one thing – all the money which has been pumped into Novell so far is not yielding the returns which either company hoped for and it is now time to further subsidise SUSE Linux.

Yes, subsidise SUSE Linux. That is the main game from Microsoft’s perspective – the subsidising of a GNU/Linux distribution which Microsoft is slowly infiltrating and trying to control. All this talk about interoperability is so much window (pun intended) dressing.

[...]

As Novell is finding out, and will continue to discover, such deals are counter-productive to the bottom line.

Novell has already tried to diffuse several points of backlash [1, 2, 3]. Judging by the ratings of Sam’s article, the the 'Novell squad', if it exists at all, might be working overtime.

Here is another new article from Server Watch.

Then remember that the company [Microsoft] isn’t subsidizing SLES to all and sundry — only to customers (including potential ones.) If Microsoft can’t stop them from moving some of their workloads to Linux, it can at least try to control them by herding them to a Linux from a company it has a strong relationship with. Since the two companies have agreed to collaborate on interoperability, and since Microsoft is paying Novell a quarter of what it’s receiving for its Linux business, it’s not a huge step to imagine Microsoft is calling the collaboration tune and Novell doing the dancing.

But Microsoft will also get something else of value from the deal: a better idea of what its customers are up to when it comes to Linux. After all, it must dearly like to have a clear understanding of the areas in which its customers are abandoning Windows for Linux, why they are doing so, how much it costs and the difficulties they face. It’s a case of heeding the advice of Chinese military strategist Sun-tzu: “Keep your friends close and your enemies closer.”

[...]

The deal has a darker side to it as well. Subsidies have a habit of distorting the market, and in this case it’s Red Hat and other competitors to SLES that have to struggle against the advantage Microsoft’s greenbacks give Novell. If Microsoft tries to use the knowledge it gains from customers to stifle the growth of Linux in the longer term then that’s altogether more sinister.

Albeit not exactly surprising.

As far as the public if aware, more layoffs are on their way. Novell is meanwhile becoming more of a prime target for an attractive acquisition. It increasingly embraces Microsoft technologies. Yesterday we showed what Novell’s CEO had said about Novell and Microsoft mixing and combining at a technical level. It’s bound to triple in scale.

There are a few speculations out there about Sun Microsystems getting acquired. According to the following, Sun’s FOSS assets could move to Novell, which would make sense for OpenOffice.org, but not for a crown jewel like Java (Novell is a .NET supporter).

HP and IBM would need to see certain mid-term and long-term value in whatever bits of Sun was left after they stripped out the poorly performing parts. IBM could take the open source stuff, like MySQL. It would have trouble taking the Open Solaris software stack on board and would surely regard the Solaris base as conversion material to AIX (less likely) or Linux (more likely). It might sell the open source part of Sun to Novell. The SPARC chip business would have to go, IBM already having PowerPC and not wanting another chip technology. Again Fujitsu is the obvious candidate.

The above is merely speculation, but it’s also possible that Novell will be acquired. Its market cap is very low ($2.13 billion compared to $6.83 billion in Sun’s case and $148.98 billion for Google) and it probably keeps dropping.

Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

A Single Comment

  1. Phobos said,

    September 1, 2008 at 6:57 pm

    Gravatar

    that analysis about sun’s being acquired is so wrong at so many levels it’s not even funny…

    IBM with MySQL???.. IBM already has DB2, MySQL makes no sense for them… besides, IBM does not care about open source, only about selling anything that can be sold, be it linux or be it AIX

    sun IP’s moving to novell??? what part of it??… Solaris? Java? xVM?… they sell linux, mono and their own xen… MySQL? openoffice?… that’s open source, they even have their own semi-fork for OOo, even if they dont want to admit it to be so… the Sparc business?… novell doesn’t make hardware

    fujitsu.. that’s pretty funny… a company that invested so much money on an almost dead technology like the itanium doesn’t want to lose all of that money by investing so much on an opposing tech… yes, they sell sparcs, but that’s not their prime product…

    sun is unlikely to be bought.. as much unlikely as is that they sell themselves…. it’s more likely to see novell bought by microsoft than seeing sun being sold at all

What Else is New


  1. Links 26/1/2021: Mozilla Firefox 85.0, Tails 4.15, Zentyal Server 7.0, GNOME 40 Alpha

    Links for the day



  2. Instead of Making Access to COVID-19 Solutions Easier Bill Gates Has Made It Harder (Patent Profits)

    Counterproductively — and at a great cost to human civilisation — Bill Gates has once again put profits and monopoly ahead of global goals such as collective health



  3. We Need More Documents Leaked to Know Intel (From the) Inside

    We invite more leaks from the belly of the beast "chipzilla", seeing that it is becoming a drone of Microsoft again, yearning for the "Wintel" days instead of moving on to a world dominated by GNU/Linux and Free/libre software



  4. Why GNU/Linux Users (and the Public at Large) Should Support Leaking/Whistleblowing Sites (Including Wikileaks)

    To demonstrate the value of "scientific journalism" (a term apparently coined by Wikileaks) we take a look at Red Hat's response to embarrassing leaks (demonstrating what a scam their certification and examination programmes really are)



  5. EPO President António Campinos is Still Not Listening, According to Internal EPO Documents

    Increasingly arrogant and unaccountable management of Europe's second-largest institution (EPO) has left staff disillusioned but still defiant; there's clearly unsuitable or unfit-for-purpose management at the EPO, self-selecting based on nepotism/loyalty so as to cover up abuses



  6. Why You Should Give Falkon (the Web Browser) a Chance on GNU/Linux, BSD, or Windows

    In this crazy new world where advertisers are the real customers and Web users ("audiences") have been reduced to mere products we need a browser that isn't controlled by a company; try Falkon



  7. Kluwer Patent Spin and Distortion of Facts (Regarding UPC and More)

    Kluwer Patent Blog disgraces the firm that puts its name on it; instead of sticking to facts they're distorting the facts and the sole/principal goal is to manipulate/mislead the public and public servants



  8. Links 26/1/2021: 4MLinux 35.1, GParted 1.2, Gnuastro 0.14

    Links for the day



  9. IRC Proceedings: Monday, January 25, 2021

    IRC logs for Monday, January 25, 2021



  10. It's Wrong to Assume Red Hat Competes With Microsoft

    The community ought to stop pretending that one monopoly seeks to replace another despite close partnerships (some would say "collusion") between the two



  11. EPO Staff Representation Complains That EPO Management Exploits Pandemic and 'House Arrests' to Overwork Staff, Lower Quality

    The EPO keeps breaking its promises to workers; not only are key employees seeing their net salary cut (inflation factored in) but pensioners too are being robbed and in the meantime the total time spent on work is increasing



  12. Fake News is Not a 'Wing' Thing

    The two-party corporate-led system (and media) would have us obsess/bicker about accuracy of news based on some binary/dual system of blind loyalty rather than underlying facts and priorities



  13. Links 25/1/2021: Huawei on GNU/Linux, NuTyX 20.12.1, Whisker Menu 2.5.3, Lutris 0.5.8.3, Linux 5.11 RC5

    Links for the day



  14. Fear, Uncertainty, and Doubt (FUD) in ZDNet is the Norm

    ZDNet continues to emit lots of garbage 'journalism', in effect Microsoft PR and what's known as "black PR" for Linux; just like Bleeping Computer, which ZDNet hired this writer from, there's no adherence to facts, just smears and innuendo



  15. Truth Tellers Aren't an Enemy of Free Software

    There's a perpetual attack on people who speak out against actors and corporations in positions of great power, however subtle and indirect those attacks may seem on the surface (they don't wish to be held accountable for defaming activists)



  16. The Linux Foundation, With Over 124 Million Dollars in Annual Revenue, is in Trouble Because of the Pandemic, So It's Trying to Reinvent Itself as Training and Certifications Outfit

    With mountains of cash and a Public Relations (PR) or marketing business model the so-called 'Linux' Foundation became reliant on travel, lodging, booths and speeches on sale; COVID-19 is a great risk to that business model



  17. IRC Proceedings: Sunday, January 24, 2021

    IRC logs for Sunday, January 24, 2021



  18. Our Move Further Away From the World Wide Web, the Browser Monopolies, HTTP, and HTML

    The World Wide Web (WWW) is going down a bad path and a clearly regressive direction; the solution isn't going 'retro' but exploring more sophisticated systems which are robust to censorship (localised or globalised) and downtime (related to censorship) while reducing surveillance by leveraging encryption at the endpoints



  19. Important Issues Not Entertained in the Community, Especially Critics of the Status Quo

    here's corporate infiltration inside communities (for oligarchy hunts volunteer, unpaid labour) and those who speak about that as a threat to our cause and objectives are painted as misguided outcasts who must be ignored



  20. Internet Origins of the Mob

    Reprinted with permission from Daniel Pocock



  21. When Proprietary Software Users Dictate the Freedom-Leaning Communities

    Fedora doesn't care about software freedom and its steward (or parent company) is sometimes imposing proprietary software on staff; they've quit caring



  22. In 2020 Onwards 'Open Source' is Just a Marketing Ploy of Monopolies, Unlike Free Software

    More people are nowadays seeing or witnessing 'Open Source' for what it truly is; the term has become a misleading marketing term of proprietary software firms looking to rebrand as "ethical" (e.g. by sharing some code with other proprietary software firms, over proprietary platforms such as GitHub)



  23. Microsoft: The Year After We Bought GitHub There Was a Significant Decline in Number of New Projects on GitHub

    Microsoft has just admitted that in 2019 GitHub saw a very significant decline in number of new projects (and users, which it is conveniently miscounting by adding 'phantom' ones) on the site. Just what we had heard before they confirmed it (and they foresaw this effect of the takeover, hence the lies about "loving" Linux).



  24. Social Control Media is a Passing Fad, We Should All Go Back to Blogging and Subscribing to RSS Feeds

    The whole "social control media" phenomenon has been oversold or promoted using lies; in reality, as a mountain of evidence serves to show, it's a way to manage society at a macro scale



  25. As Andrei Iancu Removes Himself From the Patent and Trademark Office All Eyes Are on Biden's Next Nomination

    Patent zealots and their front groups already lobby Joe Biden to put one of them in charge of the U.S. Patent and Trademark Office; we'll soon see if Joe Biden "means business" or simply means monopoly/large corporations (and their law firms/departments)



  26. Data Point: GNU/Linux Share in Desktops/Laptops Nearly Tripled in the Past Decade, Peaking This Past Month (All-Time High)

    Contrary to what some publishers try to tell us, GNU/Linux is still growing and mostly at the expense of Windows



  27. IRC Proceedings: Saturday, January 23, 2021

    IRC logs for Saturday, January 23, 2021



  28. Links 24/1/2021: Nouveau X.Org Driver Release and GhostBSD 21.01.20

    Links for the day



  29. InteLeaks – Part XXX: Harbor Research's Pseudo-scientific 'Research' for Intel, Bizarrely Suggesting a Microsoft Partnership for a Domain Largely Controlled or Dominated by Linux

    The full document that Intel paid for and in turn used to justify cracking down on Free software (obliterating Free software-based workflows inside Intel), instead outsourcing all sorts of things to proprietary software traps of Microsoft



  30. Chromium and Chrome Are Not Free Software But an Example of Microsoft-Fashioned Openwashing Tactics

    It's time to reject Google's Web monopoly (shared with other companies but still an oligopoly); removing its Web browser would be a good start


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts