Banc of America Securities analyst Paul Dravis issued a report this morning downgrading Novell's stock from "buy" to "market performer." Dravis cited concern over the recent departure of marketing executive Chris Stone and "varied departures and layoffs of marketing personnel" which could impact efforts to sell a number of new products.
Shares closed down 2.12 to 18.44.
Dravis wrote that the company has "exceeded our expectations on the product and technology side" but that he was increasingly concerned about marketing activity and sales execution over the last few quarters.
Others are more optimistic concerning the company's prospects, pointing to Novell's strategic shift away from its core NetWare operating system to its directory software technology, called NDS.
"I feel good about where Novell's going right now," said Joel Achramowicz, equity analyst with Preferred Capital Markets.
"The key area of growth for Novell is in the role the directory will play as the Internet builds out," he said.
Stone, former senior vice president of corporate strategy and development, resigned in September to found an Internet start-up. Stone's new company plans to specialize in e-commerce application software that takes advantage of directory services, which, not coincidentally, are a key component in Novell's software product line.
Novell hired the former chief executive at Hybrid Networks and industry veteran Carl Ledbetter last week to fill Stone's post.
Following Stones departure, Patti Dock, vice president of marketing, resigned from the Provo, Utah-based network software maker last month. A Novell representative said Dock's departure was connected to an ongoing overhaul of the company's marketing and product management units
Last week, Novell laid off 60 employees, or roughly 1 percent of its workforce as part of an overall realignment.