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Technology Stocks : Dell Technologies Inc.

DELL 129.98

-6.2%

Dec 12 9:30 AM EST

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To: Eggolas Moria who wrote (111226)	3/24/1999 10:10:00 AM
From: Eggolas Moria	of 176387

Since no one really got the numbers, I'll provide them. IBM lost about $1 billion pre-tax on its PC business. It lost money in 1996 and 1997 also. Some accounting issues involved here that make the numbers a bit murky and certainly the loss is less than it appears due to allocated expenses, but essentially the PC business appears to be running at a loss and not covering the cost of capital. Should IBM exit the PC business? That would certainly make Milunovich happy as he's been advocating such and his solution would make Dell holders very happy: IBM should exit the desktop and consumer PC business and OEM from Dell or Intel. Right now, that doesn't appear to be IBM's strategy, but keep it in mind. Even this is the DELL thread, ruminate a little on these figures: IBM has about 65% of pre-tax profits from software and services and 29% from hardware. Financing and servers most profitable segments. Gerstner says some very intriguing things about the PC business in general and the growth of information appliances in his Letter to Shareholders.

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