Upgraded by CIBC from Sector Underperform to Sector Perform

6.7 19.73%

Downgraded by JP Morgan from Overweight to Neutral

From Barron's 5-28-07

"Openwave (ticker: OPWV) shareholders anxiously await a buyout for the mismanaged mobile-communications-software concern. Sybase, a database and enterprise-software vendor, emerged as a leading suitor for the Redwood City, Calif., outfit last week. The news surfaced after Openwave's largest independent shareholder, Harbinger Capital Partners, offered to take a majority stake in Openwave, through an unsolicited cash bid of $8.30, with a potential dividend sweetener. The Harbinger offer roughly equaled Openwave's average share price for May. But propelled by speculation about competitive takeover bids from Sybase and others, the shares late Friday were a bit above 9."

Openwave Systems Higher on Takeover Rumor

OPWV - turnaround story. Going to be profitable over next year.
Insiders are buying millions of dollars worth of stock. Company has
$200MM cash. Company just guided down and CEO resigned but Merril
Lynch hired to explore options. This is one I like the least but still seemed interesting.

Openwave Systems (OPWV)
A group including Harbinger Capital Partners Master Fund I and Harbert Management raised its stake to 10.61 million shares (11.2%), after buying 610,000 on March 6-7 at $8.20 to $8.30 each.

One shareholder thinks that Openwave is worth at least $12-$14 a share as a buyout candidate. His math: two times fiscal year 2008 sales projections of about $400 million divided by 85 million shares (after an announced stock buyback is completed). That equates to about $9.40 a share, plus $4.70 in cash. "To me, it's a cheap stock," he says.

However, Openwave CEO David Peterschmidt is engaged in a testy battle with one of Openwave's biggest shareholders, Harbinger Capital, a $7 billion hedge fund with more than an 11% stake in Openwave (ticker: OPWV).

"You have a gem, but it is going to take an effort to get management out of office," says Michael Goldman, chief investment adviser for Abbot Capital Partners in Los Angeles, which has a less-than 1% stake.

ceo good reputation
company financials

Has potential for growth

From Barron's 8-6-07:

"Harbinger Capital Partners Master Fund I liquidated its holdings and withdrew its appeal of a court decision regarding nominations of directors to Openwave's board. On July 6, Harbinger reported holding about 7.94 million shares (9.6%)."

From Barron's 7-16-07:

"A group including Harbinger Capital Partners Master Fund I reduced its holdings to 7.94 million shares (9.6%) by selling 1.17 million from June 29 to July 5. The sales were done at prices ranging from $6.20 to $6.29."

From Barron's 7-9-07:

"A group including Harbinger Capital Partners Master Fund I has 9.11 million shares (11%), after selling 2 million on June 25 and 26 at $6.25 to $6.58 apiece."

Got burned once with hype. Scared to try again

unpredictable

KILLED BY TECH BUBBLE