"Corel's Michael Cowpland -- under siege from insider trading
allegations, lawsuits, a failed merger, fleeing executives, a
clapped-out share price, general credibility problems and, now, a
severe cash crunch -- managed a minor miracle this week when he
arranged about $15-million in new financing. He said the fresh
money, combined with an aggressive cost-reduction effort, will
allow the software company to remain "an active and dynamic member"
of the tech industry."
"Now where have we heard this before? Mr. Cowpland is no slouch
when it comes to making buoyant predictions -- "We've never been in
a more exciting position than today," he said a year ago as he
assured investors of strong results to come -- and his latest
remarks are very much in the same vein. But this time, no one was
buying the story. Shareholders pushed the stock price down $1.20,
to $4.50. During the height of the Linux craze, in December, Corel
reached a peak of $64.65."
"The lack of enthusiasm among investors suggests that the
$15-million financing, whose value could potentially rise to
$30-million, will do no more than buy the company a bit of time
before it faces another cash crisis, one that may or may not get
resolved. Indeed, Corel warned in April that it could run out of
cash by July if its deal to buy Inprise -- a California software
company that happened to come with $240-million (U.S.) of cash --
fell through, which it did. A jaunt through Corel's financial
statements and regulatory filings, though, paints a bleak picture.
It will take a lot more cash than the amount it just raised to get
it through the year."
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