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Technology Stocks : Dell Technologies Inc.

DELL 124.74

-6.8%

11:48 AM EST

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To: edamo who wrote (150887)	1/10/2000 12:03:00 PM
From: jim kelley	Read Replies (2) of 176387

The issue of whether DELL has been forthcoming in reporting quarterly problems has been raised by a few on this thread. Certainly, last quarter DELL did warn when it got hit with a memory price spike in the last month of the quarter. Some have tried to make the case that DELL was adversely affected by the Taiwan earthquake and that was the cause of their shortfall. I looked at this issue and found Meredith's statement to be accurate using my quantitative model of DELL's business. The hit was about 60 M at the low end of the range that Meredith mentioned. The reason for the hit was not the Taiwan earthquake but the 820 motherboard/RDRAM fiasco. DELL was not responsible for this but was obviously affected by it. I believe the company's integrity is intact. Looking at results throughout the entire year, DELL is tracking somewhat above forecast. In general DELL's performance is highly predictable over two quarter intervals. This quarter the GTW report seems to indite INTC's ability to deliver 820 motherboards and certain PIII's.The shortage of 820 MOBO's created an unexpected high demand for the 440 BX motherboards. It may be that GTW simply did not have access to the additional supplies they needed and DELL was not affected. Indeed, DELL has taken the position that their situation has improved throughout the quarter as far a component supply is concerned. I am inclined to believe them. This uncertainty will probably be resolved by INTC quarterly report due out this week. If the supply problem is limited to GTW then the performance of DELL, CPQ etc will depend on how strong INTC's report is and prospects going forward. :)

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