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Technology Stocks : Dell Technologies Inc.

DELL 120.07

-3.1%

Jan 7 3:59 PM EST

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To: Jim Patterson who wrote (42086)	5/14/1998 3:07:00 PM
From: Tumbleweed	Read Replies (1) of 176387

In the current market, Disc drive suppliers do what they are told. I know if I were a disk drive supplier, I would give better prices if I know that customer was going to take delivery of at least X number of drives. Also, dont forget that the cost of something isnt just its price. If CPQ buys a disc drive for (say)$5 less than Dell, CPQ also has to fund the (say) $100 cost of that unit for the (?10?) weeks inventory. And also, that item is depreciating over that 10 weeks. At the moment, quite possibly by much more than the $5! [due to Asia troubles.] ....BTW, anyone want to buy my Hong Kong mutual fund? :-( Whereas Dell buys and sells at todays prices, not those of 3 months ago. So the risk is practically zero, and they are using their cash much more efficiently. A given amount of capital will let them build more machines than CPQ. Dell has practically no inventory, and many of their customers have paid up front for the machine! I doubt this is the case for CPQ, I can't see their distributors paying 3 months in advance for systems. (Good deal if they could get it!) JoeC

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