Openwave Systems: Correction Unjustified, Shares On Sale

Openwave Systems (OPWV) provides software products and services for the communications and media industries worldwide. It developed much of the technology behind the wireless application protocol [WAP] standard.

Openwave has been suffering due to losses in their server and client business, increasing buy-out speculation and the fact that they withdrew guidance for third and fourth fiscal quarters. In addition to this, shares have also experienced increased volatility due to the expiry of the tender offer from Harbinger Capital to increase their 13,4% stake to 49%.

This is an extremely interesting company that has significantly contributed to the wireless world as we know it and that will continue to be a key player in the future. We feel that the correction is not justified and that at 6,18 USD, the shares are currently on sale.

Furthermore, the buy-out chapter is far from being closed, they confirmed that they had retained Merrill Lynch (MER) as a financial adviser to explore strategic alternatives, including a possible sale and Hewlett-Packard (HPQ), Nokia (NOK), Microsoft (MSFT), Private Equity or even Harbinger could still surface as potential buyers.

As Warren Buffett said: " We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful”.

OPWV 1-yr chart

Disclosure: none