Bonum Certa Men Certa

How Much Did Novell Fool Wall Street This Time Around?

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.

Comments

Recent Techrights' Posts

If Matthias Kirschner Loves Free Software, He'll Change the Name of the Microsoft-Sponsored Organisation He Governs (in Order to Avoid Confusion)
The FSF-EEE does not really like Software Freedom, it just loves money (including Microsoft's)
EPO's Local Occupational Health, Safety and Ergonomics Committee (LOHSEC) in The Hague: Workers Are Getting Sicker, Conditions in Which to Assess Patent Applications Deteriorate
"According to the Office statistics the total number of days of absence has gone up from 12.4 to 13.1 total number of sick days per Full Time Equivalent (FTE) from 2023 to 2024."
The Standard Needs to Improve Its Standards for Fact-Checking, Aaron Swartz Had Nothing to Do With Reddit and He Detested the Company That Created It
The Web is already bad enough as it is
New Paper From the EPO Highlights Large-Scale Discrimination at the Office, Where People Are Rewarded for Granting More and More Illegal Patents
Even the Kremlin is probably more competent than this
The Ultimate and Inevitable Fall of OpenAI (Even Brave is 'Bigger' Now)
"When you advertise at the Super Bowl, you’ve reached just about every consumer in America. It’s the last stop. If you’re not profitable yet, you never will be."
 
Scheduled Maintenance Tomorrow and on Valentines
If the site (or Gemini capsule) is offline for a bit, the maintenance windows are likely the root cause
Soylent News Lessens the Scope of Discussion Due to Persistent Trolling and Online Abuse
if they make it a lot harder for new people to participate, then they limit the "general appeal" and reach
When the Livestream of Richard Stallman is Apparently Bury-Brigaded Offline You Finally Learn to Avoid Google/YouTube for Streaming
Please, people, stop uploading to Google/YouTube
Links 10/02/2025: Ban on D.E.I. Language, Listeria Risk/Outbreak
Links for the day
Links 10/02/2025: Announcing "Stringless" and Mental Health Improvement
Links for the day
Links 10/02/2025: Facebook Mass Layoffs, "Meta" Did What Aaron Swartz Had Done But to the Tune of 81.7 Terabytes
Links for the day
Microsoft Tarnishing the Brand of Arch
Of course Arch can do whatever it wants, but being associated with Microsoft is a badge of shame
Adding Slop to Your Blog Only Makes One Assume All the Text is LLM Slop
Simon Coter from Oracle has turned to slop
Macao is Leaving Microsoft Behind
Windows is falling to new all-time lows
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, February 09, 2025
IRC logs for Sunday, February 09, 2025
Microsoft's WSL (LSW) Shows That It Can Never Love Linux, Only Windows
that's just how Microsoft rolls
Activism in Times of War and a Coup
'Linux' Foundation works for fascism
What the Silencing of Neatnik Tells Us About Linus Torvalds Inside a Microsoft-Dominated 'Linux' Foundation
Is Linus Torvalds free to express his mind as he wishes about every topic, even just any technical topic?
Windows Down to 11.35% in Senegal, as Measured by statCounter
Another all-time low (Windows was at 99% in 2009)
"Latest Technology News" in BetaNews is LLM Slop Promoting OOXML and Proprietary Software at the Expense of LibreOffice and OpenDocument Format (ODF)
Remember that "open-source" and Open Source aren't the same; the former is fake
Links 09/02/2025: Coffee, Toxic Productivity, and Programming
Links for the day
Debian's Human Rights violations & Swiss women Nazi symbolism
Reprinted with permission from Daniel Pocock
Links 09/02/2025: Software Patents on MP3 and Another Scam Dressed Up as "Crypto"
Links for the day
Links 09/02/2025: Russian Energy Cut Off, LLM Pushers Show Signs of Desperation
Links for the day
Richard Stallman (RMS) Does Not Have Media Companies and Lobbyists on His Side, But His Message Spreads Regardless
The message of RMS is spreading in spite of all the smears
GNU/Linux Rises to All-Time High in Chile
sharp rise for GNU/Linux in Chile
Links 09/02/2025: Hottest January on Record, Panama Blackmailed
Links for the day
Why We Still Love Gemini Protocol
Gemini Protocol may seem like something "old" (it's actually very new) and something "nobody would use", but many people use it
Gemini Links 09/02/2025: "Died as a Mineral" and Game Interface for a Non-Game
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, February 08, 2025
IRC logs for Saturday, February 08, 2025
Links 08/02/2025: UK Back Doors and Religious Fundamentalists in Positions of Higher Power
Links for the day
Today's IBM (Red Hat) Isn't the Company That Fought a Microsoft-Sponsored SCO in Court
IBM is nowadays in a state of rapid disintegration
When You Simply Rebrand Almost Everything as "Hey Hi" ("AI"), "Hey Hi Workloads", "Hey Hi Datacentres" and Whatnot
The "growth" has been a growing lie for years if not decades
Microsoft Windows Falls to 12% in Myanmar
Remember that Microsoft is virtually 0% in mobile
This is the Man Who's Attacking Linus Torvalds et al in "a Disease" (Social Control Media)
One thing that Richard M. Stallman and Torvalds can agree on is that Social Control Media should be avoided
Gemini Links 08/02/2025: "Thought Leaders" and Returns to Gemini Protocol
Links for the day
Links 08/02/2025: MElon Coup, Mass Layoffs at Facebook, and PlayStation Network Down
Links for the day
Unlike GAFAM, Free Software Serves You, It Does Not Serve Governments and MElons (Overlapping Forces)
Tired of oligarchy controlling your life through gadgets and "apps"?
On Wars Against Founders
We need to insist that founders remain
When It Comes to Social Control Media, Linus Torvalds is Channeling Techrights
GAFAM workers know exactly who to aim at
New EPO Paper: Promoting (Rewarding) People Who Grant Many Illegal European Patents to Make More Money (at Europeans' Expense) While Patent Courts in the EU Are Themselves Illegal
now the coup is sort of complete and even the "courts" are part of the corruption
Slopwatch: Carnival of LLM Slop and FUD Spewed by Bots, Pasted in by MaKenna Hensley and Day
Welcome to the Web in 2025. Articles about "Linux", "Security", and the Web (e.g. "Firefox") are fake.
Links 08/02/2025: News Corp Admits Traffic Declines, Wildlife Trafficking Tackled
Links for the day
Gemini Links 08/02/2025: Lamp and Notions
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, February 07, 2025
IRC logs for Friday, February 07, 2025