From March until June, Borland Software's (NASDAQ:BORL) stock price swung from $5 to $6.20. With the surge in buyout activity, there was some buzz that the enterprise software developer may go private. But with private equity crumbling, so have Borland shares. Things got worse last week, as the stock price fell 11% to $4.92 on Borland's fiscal Q2 results.

Total revenues plunged 17.5% to $63.4 million. Borland's main source of revenue is selling Application Lifecycle Management (ALM) software and development tools, which accounted for 62% of its revenue in Q2.

Borland is betting the company on ALM, which helps customers develop and deliver complex business applications. Unfortunately, license revenues fell 23% to $15.4 million as several large deals slipped at the end of the quarter. Borland also indicated that some of its new products are not getting traction.

While it's true that license revenues can be volatile, the fact remains that the ALM market is intensely competitive. Rivals include IBM (NYSE:IBM), Hewlett-Packard (NYSE:HPQ), and CA (NYSE:CA).

The CodeGear division suffered a 29% drop in license revenues to $9.1 million. Again, the competition is tough with players like Microsoft (NASDAQ:MSFT), and it looks like customers have been holding off because of the restructuring.

In fact, because of the downward momentum in the CodeGear division, Borland lowered its full-year guidance from $290 million-$310 million to the $275 million-$295 million range.

Still, there were glimmers of positive news. Over the past year, the net loss fell from $19 million to $11.2 million. The company has slashed its operating expenses by 22% over this period of time. Measures include relocating the headquarters from Silicon Valley to Austin, Texas; the streamlining of the enterprise resource planning (ERP) systems; and layoffs.

But cost-cutting will do little against the competition or improving growth. After all, Borland has a spotty history when it comes to expanding its business. And without a frothy buyout market, it's pretty tough to get excited about the stock.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 4,317 out of more than 60,000 in CAPS.