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Technology Stocks : Digital Equipment Corp. (DEC)
DEC 15.41-2.7%Dec 8 3:59 PM EST
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To: Mike V. who wrote (2678)1/8/1998 9:16:00 PM
From: John Sladek  Read Replies (1) of 3276
 
Mike: I know that several people have already posted on the pre-announcement topic, and I don't really want to beat a dead horse, but here is my take on it.

If there are material changes in the company the management must inform the public. I would suspect that earnings falling short of analysts expectations is not considered to be a material change in DEC. It may have significant impact on DEC's share price, while not having a large effect on the company itself. "Singficant" should be measured with respect to the company.

If DEC is going to announce a loss, rather than the expected profit, then this might constitute a significant event, since the company will be going from profitability to loss. If they are going to have a large restructuring (with associated write-offs), or sell one of their divisions, then they would also have to announce this.

I'm not sure, but I suspect that the preannouncements related to earnings in the past couple of years would have been either because of the unexpected write-offs or unexpected reversals from profitability to non-profitability.

I think that things like the press releases related to the Intel lawsuit and settlement are also an example of DEC making announcments of items that are significant to the company.

Thanks for getting the info from DEC.

Regards,
John Sladek
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