UPDATE 1-Corel surge leaves analysts puzzled
(Recasts adding analyst comments, updated share price, adds byline.) By Susan Taylor
OTTAWA, March 28 (Reuters) - Analysts were puzzled by gains as large as 17.5 percent in battered Corel
Corp. shares on Tuesday on the heels of a relatively minor licensing deal announced by
the software developer.
Bargain hunters looking for cheap software firms connected to the hot Linux operating system could be finding
Corel's low price appealing, suggested Duncan Stewart, technology analyst and fund manager at Tera Capital
Corp.
"I think some of it's dead-cat bounce," he added, referring to a recovery from last week's market losses following
Corel predictions of at least two more money-losing quarters.
The strong gains on Tuesday followed news that International Microcomputer Software Inc. , which
sells images over the Internet, will obtain 96,000 color graphics from Corel division GraphicCorp.
The images will be distributed on IMSI's Internet business ArtToday.com, which offers photos, fonts and digital
content to 1.4 million subscribers.
Financial terms of the deal were not disclosed and officials at Ottawa-based Corel and IMSI, based in Novato,
California, were not immediately available for comment.
"I didn't think it was particularly a big deal," said Jean W. Orr, technology analyst at Bluestone Capital Corp. "I
really can't figure out what would be so positive -- and on such high volume."
Orr added there was no news from Inprise/Borland Corp. , the California software developer Corel
recently said it would acquire. Both firms are expected to soon complete their filings on the deal with U.S.
securities regulators.
Corel stock roared to C$17.45 on the Toronto Stock Exchange before slipping to C$16.50, a gain of C$1.65, or
11 percent. That is well off the stock's record high of C$64.65, hit in December, but significantly betters the
52-week low of C$3.80.
The surge follows a dramatic tumble in Corel stock last week after the firm reported a money-losing quarter and
forecast six more months in the red.
The stock dove from C$19.50 on March 20 to a nadir of C$13.50 three days later before staging a weak
recovery.
On Nasdaq, Corel stock picked up 1-6/16, nearly 14 percent, on Tuesday to trade at 11-7/16 on heavy volume
of more than 4.1 million shares. Corel said on Monday it will license source code for IMSI productivity software
products FLOW!, for charts and diagrams, and TurboProject, for project management. ($1=$1.45 Canadian)
((Susan Taylor, Reuters Ottawa Newsroom, 613-235-8385, e-mail susan.taylor1@reuters.com, fax
613-235-5890))
REUTERS
Rtr 15:39 03-28-00 |
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