Its numbers show third quarter sales slumping from $216m to $199m year on year, an 8% drop, with net income dropping just over 5%, from $16.6m for the same three months in 2009 to $15.7m.
To be fair, those aren’t precipitous, company-ending numbers. But they do tend to suggest, to use the old American analogy, a steep decline in altitude accompanied by a marked increase in velocity, shall we say, which is neither an encouraging thing in company performance, let alone jet flight.
"Our third quarter revenue was below our initial expectations, which we believe is principally related to customer uncertainty associated with [our] ongoing review of various alternatives to enhance stockholder value," Ron Hovsepian, the firm’s current president, said in the accompanying company spin, I’m sorry I’ll read that again, in-depth communication with supportive investors.
That review old Ron is so coyly referring to could also be characterised as the Board tearing its hair out trying to work out what the Hell to do next – but anyway:
"However, I am pleased that we achieved consistent profitability levels," Hovsepian gushes. "The growth prospects of our target markets remain strong and our focus going forward is on returning to top line growth via execution of our differentiated strategy, WorkloadIQ [etc etc]."
To which one is tempted to say – mate. Give it up. These numbers are Nature’s way of telling you your ‘strategy’ is as attractive to the market as 24×7 live streaming is of the ongoing last few days of Big Brother is to anything other than the catatonically depressed.
As it stands, Novell is tanking. In March, Hovsepian and his team rejected an unsolicited (aka the one we know about) offer to buy the company for $5.75 per share from a big hedge fund saying the offer had insufficient upside, i.e. punters holding Novell paper wouldn’t make enough. Now Novell stock is trading under that Elliott Associates bid price.
OK, so what is really going on here? Hovsepian is a smart guy and must know that his legacy will now be about transitioning the technology and customer assets of this now 31-year old Utah-based firm (the company that became Novell started in 1979, Novell popped up in 1983) to a better home. He will presumably be on a plane most hours of the day going to hawk his company and looking to leverage what he can. He can offer a 3,600-strong company that is the best part ($862m last year) of a billion dollars in size operation, he has his Linux story, he has a strong customer base.
So either he isn’t selling the company well enough – or he doesn’t really want to sell at all.
One is reminded a little of our friend at Lehman Brothers, Dick Fuld, who just refused to wake up and smell the coffee in time and sell when he should have, condemning his company to the ashes and tipping us all over into global recession (if you haven’t read Sorkin’s ‘Too Big To Fail’ yet – er, why not, do you not want to know how the real world works or something?).
Ron – don’t become the IT world’s Fuld. Make a deal happen, make it happen fast, buy the damn yacht and let’s all move on.
