Compaq Message Board - Msg: 3577795

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Technology Stocks : Compaq

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To: Andreas who wrote (18824)	3/2/1998 6:50:00 PM
From: David E. Taylor	of 97611

Right on the heels of the report from the ML conference from CPQ about pricing competition came the news wire at 13:11 EST that CPQ was reducing prices on its entire Armada notebook line by 8% (highend $5000+) to 25% (lo end <$2500). CPQ started down almost immediately from its intraday hi of 33.5 to close at 31, DELL got caught in the down draft, and other tech stocks too. Obviously the market is hypersensitive to such news. There are three possible reasons for CPQ's price reductions: (1) pricing pressures as reported, (2) CPQ clearing out the existing Armada product line inventory to make way for the new notebook line scheduled for intro in April, (3) CPQ finally passing on lower component prices now that it's out from under the fixed price component supply contracts that have been discussed previously on this thread. Any thoughts or additional info out there? Whatever the reason(s), we may see more downward pressure on CPQ, DELL and other tech stocks tomorrow. David T.

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