“Following the collapse of a merger deal with California
software maker Inprise Corp. [NASDAQ:INPR], Ottawa-based software
firm Corel Corp. [NASDAQ:CORL] is reportedly very close to running
out of cash. A report in the Toronto Globe & Mail said
analysts predict Corel’s cash may quickly dry up now that hopes of
tapping into an Inprise cash reserve of $240 million have been
dashed. The proposed merger between the two firms was canceled on
Tuesday and Corel announced it would seek ways to cut costs by $40
million, including laying off employees, while seeking other
sources of funding.”
“Corel’s president and CEO, Michael Cowpland, said on Tuesday
his company is in “perfect shape” to take advantage of the growing
market for Linux software, and would return to profitability in the
fourth quarter. The Financial Post also reported that the
beleaguered firm has garnered strong support in Internet chat
rooms. The newspaper said that, in the 30 hours following the
announced termination of the Inprise deal, more than 700 people
posted messages on a Yahoo Web page dedicated to the company and
most praised the firm’s products. While some messages blasted
Cowpland’s perceived propensity to wheel-and-deal, others defended
his strategy and even predicted Corel stock would eventually
skyrocket. One typical comment, posted by “zaxbowwow,” read, “As
the most noticeable software company in Canada, Corel is
practically a national icon. Getting some money to get through the
current crunch will not be a problem.” “
“A report in The Ottawa Citizen newspaper said that because
Corel is relying heavily on increased Linux software usage, the
potential breakup of Microsoft Corp. could open vast new market
possibilities. While Linux use has exploded in recent months, only
4 percent of the market is geared toward desktop software, and that
is the arena Corel has chosen to play in, the newspaper said.”