According to a report published on CNET last week, shares in business software firm Baan have fallen to a near record low as attention shifted from its losses last year to its long-term viability.
Last March shares fell to an all-time low of 6.15 euro ($6.35), and last week they were just above that figure, at 6.21 euros ($6.41) after a fall of 30.6 percent.
Investors last week were increasingly unsure as to whether Baan will survive, following Tuesday's announcement that chief executive Mary Coleman would depart and that losses for the fourth quarter were expected to reach $240-250 million after restructuring.
Their skepticism was increased by a recent research note from Deutsche Bank that set a share price target of 3 to 4 euros ($3.1 to $4.1), and threw doubt on the assumption that a recent Fletcher International deal would continue to keep the German company off the rocks..
"The fact that Baan's credit ratings were cut by S&P to junk-bond-like status has caused us to re-examine our claim that the company is likely to be kept out of financial difficulties by the Fletcher group," Deutsche Bank said.
According to the CNET report, Deutsche estimated Baan's available cash at $285 million, adding, "If the cash burn continues at $40 million plus (per quarter), this won't last long."
ABN AMRO analyst Ron Belt expressed his concern, saying "One of the crucial areas is a brand name. The product is OK, but you need people to sell it. If the CEO leaves, that's clearly very bad. Sales people have left in the past. You can bet who are getting the head-hunter calls now."
Another analyst, ING Barings' Cornelis Bos commented that Baan would probably need extra financing within the next two years, beyond the Fletcher deal.
Speculations in early 99 that Baan would be bought by one if the IT giants - Microsoft, Oracle, IBM - never materialised, but the subject of take-over has been raised again, with Siebel's name being added to the list.
Arguments detracting from Baan's desirability include the notion that a company might alienate current and potential partners in the software market by purchasing one of their rivals, and the lasting notion that $1 billion is a bit steep for a company making heavy losses.
The light at the end of the Baan tunnel may come in the form of support from Microsoft. According to the CNET report, Baan's new products are among the first in the business segment to boast full Windows 2000 compliance.
"Microsoft needs Baan to be successful," said Marc Geall, technology analyst at Schroders in London, suggesting the sales incentive could prompt the Gates mob to lend either financial or management support to Baan.