BlueStone Capital Partners Announces Investment Opinion on Corel Corporation.

Business Editors

NOTE TO EDITORS: The following is an investment opinion issued

by BlueStone Capital Partners

NEW YORK--(BUSINESS WIRE)--May 3, 2000

BlueStone Capital Partners, L.P. Initiates Coverage of Corel

Corporation (CORL) with a 2-2 Rating

Senior Analyst Jean W. Orr, CFA, of BlueStone Capital Partners, L.P. initiates coverage of Corel Corporation (CORL; NASDAQ-$7.69) with a 2-2 Market Perform-Market Perform investment rating. The intermediate price target is $8 and the long-term target price is $12, according to the analyst.

Analyst's Summary

-- We are initiating coverage of Corel with a 2-2 investment rating. Corel
produces the WordPerfect suite of office productivity applications and
CorelDRAW, a leading graphics software package. The increased importance of the
Internet and the growing popularity of the Linux operating system present Corel
with new opportunities, in which the company is aggressively moving to take
advantage.

-- In fiscal (November) 1999 Corel recorded a modest profit for the first time
in five years, but in fiscal 2000 the company is investing heavily in new
businesses while sales of the basic Windows applications are declining. As a
result, we do not expect the company to be profitable in fiscal 2000. Corel and
Inprise/Borland, a supplier of software development tools, have announced an
agreement to merge with the combined company to keep the Corel name. Under
terms of the agreement, Inprise/Borland will become a wholly-owned subsidiary
of Corel maintaining its offices in Scotts Valley, California. Inrpise/Borland
shareholders will receive .747 shares of Corel for each share of
Inprise/Borland in a tax-free exchange.

-- Although this merger has been approved by the Boards of Directors of both
companies and the preliminary S-4 has been filed, recent comments by the
Inprise/Borland management indicate that they are re-evaluating the proposed
transaction. Management has requested that the investment banking firm that
provided the fairness opinion for Inprise/Borland reconsider the merger terms
in light of Corel's first quarter results and current cash position. This
transaction was scheduled to close by midyear and, due to the amortization of
intangibles, would result in significantly larger losses near term.

-- We estimate Corel will record a loss of $0.81 per share in fiscal 2000
before one-time gains or losses, not including Inprise, and assuming the
company continues with its current spending plans. If the Linux business
develops quickly, the company could record earnings per share of $0.14 per
diluted share in fiscal 2001 without the Inprise merger. Using these revenue
and earnings assumptions, the company will need additional cash before the end
of the year.

-- Although we believe Linux offers Corel a new opportunity for growth, this
market segment is early in its development and it is not clear how quickly or
how large it will grow. The company's Windows business fluctuates and is
dependent on product cycles with an underlying growth rate of 7% to 8%. In our
opinion, the Windows business is fairly mature, the Linux growth is uncertain
at this point, and the integration of Inprise and Corel products will take some
time. Therefore, we want to see some of the uncertainties surrounding this
company resolved before we revise our investment rating.