I don't know
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| Author | Content |
|---|---|
| Jack_ Feb 19, 2007 1:31 PM EDT |
When a choice of words as "fend off" are used it makes me believe Novell is having issues it must deal with. Novell has been in the press with many offerings of information about the deal, as if they are tring to get back something lost as a community. Its a big question what is going on at Novell, business must not be doing well as Novell had high-hopes it would. If stock price has meaning, RHT(RedHat) is just about a little more then three times the value of (NOVL)Novell. I would take the stock value as a sign that investors don't agree with Novell's ideas. |
| DarrenR114 Feb 19, 2007 3:14 PM EDT |
If there was the same market cap for both companies, you might have a point. The fact is that Redhat has a fraction of the market cap, and a lot more debt than Novell. |
| dcparris Feb 19, 2007 3:23 PM EDT |
I couldn't take stock value as a sign since the deal hasn't be around long enough for investors to determine one way or the other whether the deal has any value. I suspect that many folks are sitting it out, waiting on Novell's target customers to buy. If it looks like people really are buying, then Novell might have a decent deal (money-wise), and investors will open their wallets to Novell. I have been wrong before though. Well, once or twice, anyway. |
| jdixon Feb 19, 2007 3:43 PM EDT |
> The fact is that Redhat has a fraction of the market cap, and a lot more debt than Novell. Afraid not. From Google Finance, RHT's market cap is $4.61 Billion, while NOVL's market cap is $2.37 Billion. I couldn't find the debt listings on Google, but My Way lists RHT with a debt to equity ration of .74 while NOVL has a debt to equity ratio of .51. So yes, Red Hat has more debt than Novell (about $3.5 Billion vs. 1.8 Billion) but they also have almost twice the market cap. Edit # 1: Note that this excludes the cash each company has on hand, which would act to negate their debt. In fairness, I should also note that I own 15 shares of RHT purchased at an average price of $12, and 30 shares of NOVL, purchased at an average price of just over $10. Edit #2: Google gives RHT a total equity of $774.41 Million, and NOVL a total equity of $1,127.30 Million. I would assume that's market cap + cash - debt for each. So, by this standard, Novell has a value of about 1.5 times that of Red Hat. |
| DarrenR114 Feb 19, 2007 3:52 PM EDT |
The headline is rarely written by the article author. It is not unusual for headlines to be worded in a misleading way to get reader attention. In this case the phrase 'fend off' seems to be meant to capitalize on the perceived controversy. |
| swbrown Feb 19, 2007 4:34 PM EDT |
> The fact is that Redhat has a fraction of the market cap, and a lot more debt than Novell. Wtf? Dude, Google RHT and NOVL. RedHat totally dominates Novell 2:1. That's an interesting "fact" you have there. |
| Aladdin_Sane Feb 19, 2007 6:01 PM EDT |
>I would take the stock value as a sign that investors don't agree with Novell's ideas. Sorry. There are many legitimate ways to compare stocks. That's not one of them. Also, you've misused the term "stock value." Absolute price per share does not correspond to value. |
| DarrenR114 Feb 20, 2007 6:53 AM EDT |
Well, that's what I get for not actually checking in well over 2 years ... C'est le vie But dominating 2:1, I don't think so - http://finance.yahoo.com/q/ks?s=NOVL http://finance.yahoo.com/q/ks?s=RHT Look at the income statements - NOVL has three times the revenue, with gross profits being more than 3:1 against RHT. |
| Jack_ Feb 20, 2007 2:04 PM EDT |
DarrenR114 Feb 20, 2007 10:53 AM 'Look at the income statements - NOVL has three times the revenue, with gross profits being more than 3:1 against RHT.' I may not agree with that, if the Microsoft deal money Novell has taken is placed into that total. Here are just a few sources of reports of Novell's revenue: [HYPERLINK@www.eweek.com] - [HYPERLINK@www.theregister.co.uk] - [HYPERLINK@www.itjungle.com] - [HYPERLINK@news.zdnet.co.uk] |
| Jack_ Feb 20, 2007 2:40 PM EDT |
Iam out-of-it today, droped a laptop of all things.
Working links I hope: http://www.eweek.com/article2/0,1895,1972539,00.asp - http://www.theregister.co.uk/2006/12/06/novell_fourth_quarte... - http://www.itjungle.com/tlb/tlb121206-story01.html - http://www.eweek.com/article2/0,1895,1980371,00.asp -news.zdnet link was wrong:- |
| jdixon Feb 20, 2007 5:07 PM EDT |
> Look at the income statements - NOVL has three times the revenue, with gross profits being more than 3:1 against RHT. Yes. But three points. First, that is gross profit, not net earnings. Second, those profits/earnings are spread among the outstanding shares. And third, you have to consider the price you're paying for those profits/earnings. Red Hat's net income last year was $79.69 Million. Novell's was only $32.07 Million. Based on the market cap and EPS, Red Hat has less than 200 million shares outstanding, while Novell has over 300 million. Thus, last year Red Hat made about $.40/share for its shareholders while Novell only made $.10/share for its shareholders. Current EPS (earnings per share) figures from Google are that RHT has an EPS of $0.33 while NOVL has an EPS of $0.02. Thus, you're paying about $74 for each dollar of profit from Red Hat, but you have to pay $350 for each dollar of profit from Novell. The only way you can consider Novell to be the better stock is if you expect a turnaround in Novell's EPS. While Novell has shown no real signs of such a turnaround, reasonable expectations, given the quality of the SuSE distribution and Novell's support structure, lead me to believe that it is not only possible, but likely. Note: This analysis is worth exactly what you paid for it. IANAFA. |
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