Borland gets boost on upgrade (update)
Borland Software Corp.’s (Nasdaq: BORL) stock was upgraded by JP Morgan Tuesday to “overweight,” or a “buy” rating.
After the market closed on Monday, the company revealed plans to relocate its corporate headquarters from Cupertino, Calif., to Austin, Tx., by the end of the year.
But that move is not necessarily what led to an upgrade of the stock, which in November was downgraded by JP Morgan to “Underweight” from “Neutral.”
JP Morgan analysts now view Borland as a “turnaround” pick for 2007. They see new management as a positive catalyst and believe that the company has a plan to deliver 10% margins in 2007 as revenue stabilizes.
Late last year, Borland was in danger of being delisted from the Nasdaq exchange over a delay in filing a quarterly report.
Meanwhile, Borland said after-hours Monday it would expand its existing Austin R&D center with finance, human resources, facilities, IT and sales operations functions.
Tod Nielsen, the company's president and CEO, chief financial officer Erik Prusch, and head of human resources Jonathan Schoonmaker will also move to Austin.
"We are making this move to take advantage of an area that combines a strong talent pool with a cost-effective environment for Borland, so that we can continue to execute on our plan to profitability, while building our company for the future," Nielsen said in a written statement.
The company said it would continue to operate global marketing, legal, and the West Coast sales and services teams from its existing Cupertino facility.
Founded in 1983, Borland has posted net losses in three of the past five years, including a loss of $51.9 million on $304.7 million in revenue in 2006 and $29.8 million on $276.7 million in revenue in 2005.
Borland’s stock was up $0.27, or 4.9%, to $5.77 on Tuesday morning. Shares have traded between $4.81 (on May 17, 2006) and $6.17 (on Oct. 26, 2006) in the past year.
