Saw an article on Street.com titled
"Capellas May Not Be Up to the Compaq Task"
Could not read it though
*****THE STREET.COM-----NOT!!!!!******
by: go_with_throttle_up
1/26/00 7:33 pm
Msg: 136206 of 136207
This is the article attributed to The Street.Com and Jim Cramer. It is NOT!
This guy is a BIG DELLHEAD. Parts of the article did more to promote Dell. This
character is a 'contributor' to The Street.Com.
<< Capellas May Not Be Up to the Compaq Task >>
By Jim Seymour, 1/26/00 5:52 PM ET
* Watching Compaq (CPQ:NYSE) CEO Mike Capellas on CNBC's "Power
Lunch" from Houston today, I was struck once again by how tough his job is.
* And how he's probably not the guy for it.
* Capellas is one of the good guys in this business…..sometimes companies in
as much trouble as Compaq need a kick-ass leader more than they need a good
and decent man as a manager.
* You can make a case that Capellas has done a fair job since he took over the
reins in July 1999.
*…the board was backing off and giving Capellas the room he needed to
maneuver…
*…Capellas having nearly absolute authority…I think his very limited progress so
far in fixing Compaq's deep, nearly systemic problems is not encouraging.
*…Compaq's stock price is up a little from around 25 when he took over in
July…CEOs are supposed to manage shareholders' assets…Capellas gets at
least a C+, for about a 12% move…
*…Compaq's earnings report on its fourth quarter…beat the First Call/Thomson
Financial analysts' consensus estimate by three cents…this is not good
performance for a company with Compaq's size and presumed power…hell of a
quarter-over-quarter fall from 1998…even a Pfeiffer-hobbled Compaq earned 43
cents on about the same total sales.
*…Compaq has slowly begun to refresh its product line…
*…big issues remain unaddressed -- or, at best, half-addressed…
*…still hasn't begun to solve its distribution problems…
*…still hasn't shown that it has any idea what to do with the troops and product
lines it inherited in its acquisitions of Tandem and Digital Equipment…
*…Ashok Kumar points out…still puts way too much emphasis on its
very-high-end Himalaya and Alpha servers…
*…has apparently stalled out in a kind of reorg interruptus...the company has
gone less than halfway toward fixing the problem…finishing the job no longer
seems at the top of Capellas' agenda.
*…Capellas spooked the market Tuesday with his Greg Maffei-like warnings that,
while he thinks 2000 earnings could be up 15% over the disappointing 1999
results, we won't see that turn for some time -- and, at least implicitly, he sees a
difficult year ahead. "The first quarter will start out a little bit slow," Capellas said
Tuesday. "We expect revenue to decline quarter-to-quarter due to seasonality
and be backloaded due to the release of Windows 2000."
Investors who bought into Compaq at its 52-week low have nearly doubled their
money -- or at least they had before Tuesday's discouraging earnings report, and
the subsequent slide in share price.
*…some analysts have been inching Compaq up in their ratings, from "hold" to
"buy."
*…seen as good signs.
*…I see worlds of hurt ahead for Compaq, despite this burst of
enthusiasm…Capellas will pull Compaq out of this swan dive, but not soon, I
think, and maybe not before being replaced by another leader.
* Sad to say, shareholders' investments in Compaq look to me like largely dead
money -- at least for the near term.
NOTE: With All Of The Credible Analysts Who Are Pro-Compaq, Look At What
He 'Dug Up!'
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