EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

03.05.09

Final Analysis of Novell’s Q1 Results and Consequences

Posted in Finance, GNU/Linux, Microsoft, Novell, Ron Hovsepian at 7:42 am by Dr. Roy Schestowitz

Novell cafe

Summary: More evidence that Novell suffers from the Microsoft deal, but the company’s CEO takes bonuses

ACCORDING TO “The Var Guy”, who has been in good touch with Novell for over a year, Novell is heading down.

Check out the one-year stock charts for Novell (NOVL) and Red Hat (RHT). Neither chart is particularly impressive, but the trends are unmistakable. As the economy went from bad to worse in calendar year 2008, Wall Street lost more and more faith in Novell. In stark contrast, sometime in late November 2008 — amid heightened credit crunch concerns — financial pundits started betting heavier and heavier on Red Hat shares.

The comments in Linux Today show that many GNU/Linux users are actually encouraged by Novell’s demise. Here is one response to Novell’s excuses:

Maybe the business world really does not want to do business with Novell. Maybe business customers really do think about the implications of Novell’s deal with Microsoft.

In addition to what we’ve already referenced, here are some more financial analyses:

One issue that we have looked at before is the excessive bonuses that Ron Hovsepian is receiving [1, 2, 3]. The following essay is dedicated to this problem.

What Novell Could Learn From HP About How to Treat Employees

[...]

[C]ontrast this with the recent announcements of layoffs at Massachusetts-based software vendor Novell. Earlier this month, they laid off approximately 100 employees due to a “global economic downturn.” I have to wonder how many of those jobs could have been saved if Novell CEO Ron Hovsepian had declined to accept the sum total of his $6.9 million compensation package last year.

I mean, it’s not as if he didn’t see the potential for layoffs coming. In a December 4, 2008, conference call with analysts he is quoted as saying, “I think we are just evaluating at this point any additional restructures or activities that may take place in 2009, and those would be largely dependent on the overall economic condition and its impact to our revenues, if any.”

In other words, the writing was on the wall late last year but he still grabbed his share of the pie.

Ron Hovsepian will find it hard to dodge criticism, which now comes from IDG as well. Financial News USA covered it also.

Ronald Hovsepian, the president and chief executive of networking software maker Novell Inc., received a compensation package valued at nearly $6.9 million, according to a proxy statement filed Wednesday.
The total was down more than 5 percent from Hovsepian’s 2007 compensation of nearly $7.3 million.Hovsepian, who has served as CEO of Waltham, Mass.-based Novell since 2006, received a base salary of $912,214 and $2 million in cash incentive plan compensation, according to a filing with the Securities and Exchange Commission.His perquisites totaled $137,014 and included $9,200 in 401(k) contributions from the company, $112,244 in deferred compensation matching contributions and $6,263 for financial planning.

What is he being rewarded for?

In other financial news, Novell’s CFO will present at Morgan Stanley’s 2009 Technology Conference.

Novell, Inc. (NASDAQ: NOVL) today announced that Dana Russell, Senior Vice President and Chief Financial Officer of Novell, will present at the Morgan Stanley 2009 Technology Conference, March 2-4, 2009 at the Palace Hotel in San Francisco. Russell’s presentation will begin at 2:20pm PST on Tuesday, March 3.

There was also a delay.

Company representatives of Novell Inc will be presenting at the 2009 Morgan Stanley Technology Conference today. The Company’s presentation is scheduled to begin at 17:20 ET.

Novell was also mentioned very briefly in the financial press under:

In its conversations last week, Novell confirmed that layoffs are coming, but it used cryptic terminology to ‘dress up’ the statement. Novell cannot operate at a loss forever. It can only delay the inevitable.

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

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

11 Comments

  1. JohnD said,

    March 5, 2009 at 9:08 am

    Gravatar

    Well any decent analyst will try to gauge public opinion of a company in addition to it financial results. So every BN support can give themselves a good pat on the back – it looks like your message is getting out to the media at least.
    But I hate to burst the bubble, the average user doesn’t care about FOSS ideology anymore then they care about MS dirty tactics. You can show the average person a preconfigured Linux machine that does everything their Windows machine can do and they’d probably buy it. Give them one with a default install and start talking about kernel version, package dependency, repositories, compiling source tar balls – their eyes will glaze over and they’ll ask for Windows.
    I’m not sure where the posters are getting their info when they say Novell is operating at a loss – the balance sheet says net income. Operating margin has doubled, liabilities decreased, equity increased. Overall number are down from the previous year, but the have net income for the first quarter as opposed to a loss in the 3rd quarter.
    Their numbers aren’t stellar, but the company is in a better position then GM. Given their cash on hand over 600mil – they could operate for at least 6 months with no income at all – I wish my company was in such a “bad” position.

  2. JohnD said,

    March 5, 2009 at 9:17 am

    Gravatar

    I’d also like to point out that CEO’s taking big bonus’ at the expense of the little guy is a world wide issue, not just a Novell issue. Look at the news and Morgan Stanley who took bailout money and made several hundred millionaires before they were bought by Citi. Refer to the bonehead who dropped 86 grand on a stinking rug. This is not to say that I agree with the bonus RH got, I think it was too high given current circumstances. That being said – a CEO who doubles a company’s operating margin should be entitled to some compensation. My personal opinion is that his compensation should be tied more closely with quarterly and yearly results.
    I think CEO bonus issues should be handled by Boycott Big Business.com.

  3. JohnD said,

    March 5, 2009 at 9:21 am

    Gravatar

    Wasn’t there a post about on here about Novell trying to inflate their stock price by repurchasing shares? My take was that it was just another “trick” by big bad Novell – well here’s a tid bit from a RedHat financial statement:
    Total cash,
    cash equivalents and investments as of November 30, 2008 were $1.1 billion
    after retiring $285 million of convertible debentures and repurchasing 2
    million shares of common stock.
    Hmm looks like Novell isn’t the only company trying to reduce it’s debt and increase share value.
    When a company increases share value does it help the little guy/gal on the street or the company execs?

  4. JohnD said,

    March 5, 2009 at 9:31 am

    Gravatar

    Wait here’s some tid bits from the Var Guy quoted in the post. This is what he had to say in Nov 08
    “Frankly, The VAR Guy doesn’t have the answers to those questions. He does know that Novell has been growing faster than the overall Linux market. And Lenovo recently introduced servers with Novell SUSE Linux rather than Red Hat Enterprise Linux.”
    and
    “Still, Novell’s close alignment with Microsoft — initially criticized by The VAR Guy — seems to be paying dividends as Novell finds itself in more and more corporate data centers. Now, Microsoft solutions providers could give Novell another boost in the IT channel.”
    http://www.thevarguy.com/2008/11/11/novell-attacks-red-hat-with-linux-migration-offer/
    And some tidbits from the post linked above:
    SUSE Linux sales continue to climb. And acquisitions like PlateSpin provide promising revenue opportunities for Novell.
    Oh, and Red Hat did land at the top of The Open Source 50, which tracks the most promising open source partner programs. (Although Novell landed in the No. 3 spot…)
    So we’re looking at the number 1 and 3 seeds in the Open Source 50 – paints a different picture now doesn’t it?

  5. aeshna23 said,

    March 5, 2009 at 1:43 pm

    Gravatar

    “When a company increases share value does it help the little guy/gal on the street or the company execs?”

    All owners of the stock–whether a company exec or the owner of a single share–experience the same percentage increase in value of their stock. Stock repurchases are often the best way a company can help its shareholders, since capital gains are treated favourably compared to dividends (in the United States).

  6. JohnD said,

    March 5, 2009 at 2:11 pm

    Gravatar

    Thanks aeshna23, but my question was a rhetorical one (I’m married to a CPA).
    I was trying to point out that the teflon boys at RedHat boosted their share price using stock buyback just like Novell. Yet Novell was panned for doing it whereas for RedHat is was seen as a positive.

  7. Dan O'Brian said,

    March 5, 2009 at 7:18 pm

    Gravatar

    JohnD: as you’ve already discovered, these BN guys have double standards.

    If Red Hat kills babies, Roy will find a way to spin it as Good For Linux. But if Novell tries to save babies, whether they succeed or not, Roy will spin it as an attempt to destroy FLOSS.

  8. Jose_X said,

    March 6, 2009 at 12:42 am

    Gravatar

    The financial pictures are always a little muddy. There tends to be overshoot and lag/lead as people fight for the best deals on stock. Also, we would be assuming accuracy of public information.

    JohnD covered a lot of points, but from what I have read indirectly (I haven’t looked at NOVL SEC reports), it seems Novell’s Linux growth depends a lot on Microsoft, and that after an initial boost, Microsoft is not coming through (at least not recently). This might be a negotiating tactic on Microsoft’s part or might be indicative of a larger rejection of Novell and/or of Microsoft’s coupon selling.

    [Dan O'Brian] >> as you’ve already discovered, these BN guys have double standards.

    There is some bias and mistakes are made. I see the same from those that defend Microsoft and/or Novell. [I'm speaking generally, of course.]

    Boycottnovell puts out info with reader comments to help all readers make up their own mind on a per topic basis. Some postings are better researched than others.

    [As an aside, Nokia seems to be doing a great job with Qt: http://www.linuxtoday.com/news_story.php3?ltsn=2009-03-05-001-35-OS-EM&tbovrmode=1 ]

  9. Jose_X said,

    March 6, 2009 at 12:56 am

    Gravatar

    Qt development has been improving quickly recently. I don’t use it, but some claim QtCreator is very good http://labs.trolltech.com/blogs/category/qtcreator/ . You can download it with the Qt libraries and use it for commercial development for no charge. You can get the source code to everything from the git repositories. Nokia also wants to work with Linux distro makers to make sure it’s as easy as pie (press a button) to install this totally free and powerful developer platform on each participating distro.

    Roy, in the future, perhaps any mention of risky and monopolist supporting mono should be followed with a word or ten on (or links to) Qt/QtCreator.

  10. Dan O'Brian said,

    March 6, 2009 at 8:26 am

    Gravatar

    Jose_X: Since you don’t seem to understand the difference, Qt/QtCreator are not alternatives to Mono.

    Qt is a widget toolkit (which is an alternative to Gtk+ or even Windows.Forms, but not an alternative to Mono).

    QtCreator is an alternative to Glade or Microsoft’s widget layout tool (whatever it’s called). Once again, not an alternative to Mono.

    You guys haven’t the foggiest clue what you’re talking about most of the time.

  11. JohnD said,

    March 6, 2009 at 3:23 pm

    Gravatar

    A little more context to the financial side of things:
    “More than 10% of the stocks in the S&P 500 trade for less than $5. And with the market continuing to fall, more big-name firms could hit ‘penny stock’ status.”
    per:
    http://money.cnn.com/2009/03/06/markets/thebuzz/index.htm

What Else is New


  1. USPTO Rewards Microsoft for Corruption at ISO by Teaching People Proprietary OOXML and Promoting Its Use

    The world's most important patent office promotes Microsoft lock-in, revealing not only corporate bias but also highlighting ways in which Microsoft crimes continue to pay off



  2. No, Startpage is Not Dutch Anymore

    Startpage is still clinging onto perceptions rather than truths; it means that Startpage isn't just betraying privacy but it's also dishonest and untrustworthy



  3. Understanding Thierry Breton: Chirac's Entrepreneurial “Joker”

    Minister in charge of the public treasury was not a career politician but an “entrepreneur” with a proven track-record as a financial wizard and “cost-killer”



  4. Links 16/11/2019: New Debian Release, Wine staging 4.20

    Links for the day



  5. IRC Proceedings: Friday, November 15, 2019

    IRC logs for Friday, November 15, 2019



  6. Microsoft Doesn't Love Linux, It Just Buys Linux

    Microsoft's takeover or abduction of its opposition's voice isn't an act of love but an act of occupation, a hostile colonisation that enables digital pillage and plunder



  7. Koch's Reply to EPO Through ILO and Techrights' Interpretation of Koch v EPO Documents Help Show That ILO-AT is Played by EPO Management

    Sending cases back and forth, without the complainant being involved, means that justice is in eternal ‘limbo’ and thus the abusive management of the European Patent Office (EPO) — first Team Battistelli and now Team Campinos — can get away with anything the bullies do (no judgment of substance being delivered)



  8. EPO Running ILO's Tribunal (ILO-AT) 'in a Loop' to Perpetually Delay and Drain the EPO's Complainants (Aggrieved Staff) Out of Money

    ILO’s Administrative Tribunal — a court for aggrieved EPO staff and other international organisations’ staff (usually known as ILO-AT for short) — is a major farce; when “time is money” and lawyers charge as much as 400 euros an hour the EPO’s management can exploit/misuse its cash reserves to also game justice and buy legal outcomes



  9. ILO is Not Functioning and ILO-AT Helps the Abusive Management of the European Patent Office

    It is becoming increasingly clear, based for example on Koch v EPO, that ILO-AT is where a lot of money will be spent on lawyers and rarely will that result in real justice (but it certainly helps EPO management pretend that staff has safeguards)



  10. Links 16/11/2019: Wine 4.20, Picolibc 1.1

    Links for the day



  11. Understanding Thierry Breton: Moral Responsibility for “a Capitalism That Kills”?

    "...France Télécom which had previously been defined by an ethos of public service, by egalitarian working conditions and by a sense of universal mission, had now been transformed into a "cash machine” whose sole purpose was to generate shareholder value on international financial markets."



  12. FOSSPatents Conference is Against FOSS, Promoting the FOSS-Hostile Construct Known as RAND or FRAND

    Do not be misled by the term Free/Open Source software (FOSS) in the name FOSSPatents and whatever relates to it (e.g. FOSSPatents Conference); it's not about FOSS but against FOSS, or pro-FRAND



  13. Europe is Under Attack

    European politicians or political candidates pretend to be 'candid'; but they're agents of Power, or put another way, they're there to make the rich and powerful class even richer and more powerful by passing new, ruinous laws in the name of 'the people' or 'for SMEs'



  14. Links 15/11/2019: New Opera and Brave, GNU/Linux Flatpa(c)ked

    Links for the day



  15. IRC Proceedings: Thursday, November 14, 2019

    IRC logs for Thursday, November 14, 2019



  16. Understanding Thierry Breton: Toxic Management Goes on Trial in France

    "In each of these cases, the suicide served as a symbolic act of protest to denounce workplace conditions at France Télécom and attract public attention to its practices."



  17. Thierry Breton's Video/Live Grilling is Over, But the Grilling Continues Online

    Elite politicians aren't reluctant to give Thierry Breton the high seat (or throne); but everyone else realises that this resembles a corporate takeover more than anything



  18. The EPO's Low Patent Quality is Not Just Suicidal; It is Illegal

    With help from the besieged Boards of Appeal (BoAs), which complain that they can no longer judge cases (appeals/referrals) autonomously and independently, the Office in Munich continues to grossly violate the EPC and mimic China's ridiculously low patent bar, which even formally permits patents on algorithms



  19. Links 14/11/2019: Mesa 19.2.4 and GCC 7.5 Released

    Links for the day



  20. Microsoft is Not an Open Source Company But Microsoft Bribed and Took Over Many Open Source Authorities (Rivals' Voice Hijacked)

    Free/Open Source software (FOSS) and GNU/Linux are being taken over by Microsoft moles, bought by Microsoft Corporation, and the collective voice of the alternative to Microsoft and Windows is being muzzled (they tell us they "love" us while they're attacking us and sometimes suing us)



  21. Techrights' Interpretation of Koch v EPO: The EPO's Management Still Attacks Staff Representatives

    The EPO hopes to get its victims (of EPO abuse) to not only foot their own bills but also the EPO's



  22. Understanding Thierry Breton: “Mister Cash” Arrives at France Télécom

    The psychological harassment of the France Télécom workforce led the "suicide wave" after Breton had left France Télécom



  23. The Breton-Battistelli Relationship and Breton Hiding His Employment Record at Rothschild & Cie Banque

    EPO scoundrels such as Battistelli are closer to Breton than most people care to realise; Breton is hiding part of his career ahead of today's grilling



  24. A Lot of EPO Staff on Dutch Land Protested (Despite Abusive Threats From Management) and a Strike is Reportedly Next

    EPO management in Rijswijk tried hard to prevent workers from protesting on their free time (lunch break), reaffirming that same old belief that nothing is changing at the EPO and nothing will change without truly disruptive action



  25. IRC Proceedings: Wednesday, November 13, 2019

    IRC logs for Wednesday, November 13, 2019



  26. Links 13/11/2019: Docker Enterprise Bought, WordPress 5.3, Qt 5.12.6 Released

    Links for the day



  27. Rebranding Malware and Spyware as 'Linux' to Dilute the Brand (and the News)

    Signal-to-noise ratio continues to be reduced, as a lot of "Linux" news has nothing to do with GNU/Linux or even with Free software



  28. Understanding Thierry Breton: In the Beginning...

    Career roundup of Thierry Breton, possibly the next EU Commissioner



  29. Startpage Has Been Delisted, But it Ought to be Blacklisted

    Startpage has just warned its fans (I am a former fan) of what Startpage itself covertly became months back



  30. IRC Proceedings: Tuesday, November 12, 2019

    IRC logs for Tuesday, November 12, 2019


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