Description

The Nasdaq rollover in the new year has put Borland (formerly known as Inprise) back into buying range. Nearly half of the current market cap is explained by the $262.6m (3.80 per share)of cash on the balance sheet with no debt.
Borland is a leading provider of Internet access infrastructure and application development tools and services for all major platforms, including Linux, Solaris, and Windows.

For the $312m you pay for the business, ex the cash, you get a depressed present $200m revenue run rate that is poised to increase substantially over the next several years. Despite today's wipeout at Oracle, better known software companies perceived as doing well sell at price/sales multiples many times Borland's paltry 1.5 x valuation.

Borland was once a giant of a company that stumbled badly. In fact several years ago, it almost didn't make it. That's when the Board brought in Dale Fuller to turn it around. He is the man who made the Apple Powerbook a blockbuster product a few years back. Fuller now believes the company is poised for growth and recently changed the name back to Borland. It is notable that Fuller's salary is ZERO! His compensation comes in the form of 1m options. He has also purchased stock in the open market as have other insiders (paying as much as 10 recently). Institutional holdings data indicate that nearly all the company's largest holders added to their position in the latest quarter, including well regarded value oriented firms like Kennedy Capital and MLAM.
The link below takes you to an analysis of the company's products and market position for those so inclined:
http://www.borland.com/about/overviews/2001_computerwire.pdf

Catalyst

You can expect a steady stream of new product announcements and major upgrades to existing products in coming quarters. Importantly, they begin shipping the first LINUX development tool later this month. Wall Street coverage is presently nearly non-existent. As the company executes, that situation will likely change and the company's shares should be rerated.