Hmmmmm, "Coming in the next few months will be an initial public
offering of Compaq's AltaVista division and a major deal
with Radio Shack, according to company executives,
who declined to elaborate."
Compaq shareholders say
they're optimistic about
turnaround
By John G. Spooner, PC Week Online
April 22, 1999 3:23 PM ET
HOUSTON -- While many of the Compaq Computer
Corp. shareholders who turned out for a meeting
Thursday said they were unhappy about the company's
sliding stock price, most were upbeat about the
prospects of Ben Rosen, chairman of the board and
acting CEO, to turn things around.
"Although our potential is great, we haven't realized it
the way we were supposed to," Rosen told
shareholders gathered here at Compaq's headquarters
for their annual meeting.
Going forward, Rosen's job will be to "increase the
long-term shareholder value of the company," he said.
"If that requires a change in our strategy or in any other
area, we will do it and communicate it to you. Our goal
is to achieve the traditional levels of profitable growth.
I'm confident that we'll return to the kind of growth that
you have come to expect."
Rosen said a search to replace Eckhard Pfeiffer, who
resigned as CEO earlier this week, has begun and will
take several months at least.
One of the areas in which Rosen expects to see growth
is services.
"Solutions don't just require hardware, they require
service as well," he said. "Service will be a very
important part of our business in the future."
Compaq officials said more than 600 shareholders
attended the event, up from about 500 last year. Many
shareholders were from the Houston area, although a
few came from as far away as Baltimore, Atlanta and
even Tokyo.
Taking the long view
Although their shares have lost about half their value
since January, many who attended the meeting were
optimistic about the company's chances of turning
things around and driving up the price of their shares.
"I'm enthusiastic. I saw the company go from nothing to
where it is today," said Bill Hoffmann, a retired
petroleum engineer from nearby Kingwood. "I think [its
problems] are like anything else, little problems [such
as service support]."
Hoffmann, a stockholder since 1983, bought his first
Compaq shares for $3. The stock price stood at about
$24 on Thursday.
Another shareholder, Knox Manford, who made the
150-mile trip from Louling, Texas, with his wife
Madeleine, said the key to Compaq's success will be
its next chief executive.
"I think Compaq is going through a tough time right
now.," he said "What Compaq needs is a good strong
CEO who can integrate the business, a guy like [IBM's
Lou] Gerstner."
Little sympathy for Pfeiffer
Pfeiffer, who told CNN last night that he was ousted
before he had time to fix some of Compaq's problems,
elicited little sympathy from the shareholders.
Pfeiffer "was not the man for the job" of integrating
Compaq's Digital Equipment Corp. and Tandem
Computers acquisitions, Hoffmann said.
"He did a good job for the last eight years, but it's time
to move on," said another shareholder, who asked not
to be identified.
Many others who addressed questions to Compaq's
board today voiced similar sentiments.
One concern expressed by shareholders had to do with
distribution.
"You can't turn any segment away," said Hoffmann. "I
don't know what other business model you can get.
There are still people who won't buy a thing on the
internet."
"Selling direct and through distribution is tough," said
Manford. "They're going to have to decide whether they
want to sell direct or to sell though distribution. Not
both."
Rosen addressed the subject by saying, "Complexity to
some is choice to others. We think the Internet is a
very effective way of distribution."
Despite problems, both Hoffmann and Manford said
they plan to hold on to their stock.
Stock shock
Others weren't so sure.
"I'm am in shock that in January our stock was over 50
and now it's at $23. That's ridiculous. How come our
stock dropped so drastically?" asked a shareholder
who identified herself as Joan.
Rosen reiterated his stand: "We're going to try to fix
Compaq. We're trying to address the problems that
you've brought up."
Coming in the next few months will be an initial public
offering of Compaq's AltaVista division and a major deal
with Radio Shack, according to company executives,
who declined to elaborate.
Shareholders today approved Compaq's board of
directors, which includes Rosen and 10 others, as well
as an employee stock purchase plan.
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