Compaq Message Board - Msg: 12723116

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Technology Stocks : Compaq

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To: Salah Mohamed who wrote (77118)	1/29/2000 11:34:00 PM
From: rupert1	Read Replies (1) of 97611

Salah: Capellas had a long time to work out the algebra of his announcements - too bad that the market is left discussing what he really said and what he really meant. Even after a couple of days, you are still labouring to explain it. Why do you think I have an obligation to check with the company before I make a comment on a report by other posters who, in turn, were relying on a Reuters report of Capellas statements? If a media source has it wrong then sooner or later we will find out. That's one of the functions of this board. For the record I reiterate the main point of my post with some elaboration: COMPAQ met the lowered estimates of 16 cents for 4Q and sold $50 million (after tax) of their investments to bump the number up to 19 cents. Capellas said he intended to use the investment portfolio as a regular profit centre and Dan Niles commented that they would do this by monetizing the COMPAQ investment portfolio as they did in 4Q. My comment was that this gives them a kind of slush fund by which they can continue to meet estimates in the future (or exceed them by whatever margin they want) by selling off chunks of their investments each quarter. Instead of lecturing me on making "wild statements" what about addressing the point? I have always appreciated your informative posts and links. I would regret it if you got caught up in the El's rather obvious personal agenda by falling in with his pretentious self-appointment as monitor of good taste and protocol. It would be better if you responded to me directly. I think COMPAQ has made a mistake in turning Alta Vista into a portfolio investment rather than an operating asset contributing a genuine new source of renewable revenues. But now that the deed has been done I think the monetizing of it and the other investments is a good thing, however it is done. It makes perfect sense to me. But in an earlier post I pointed out that however regular COMPAQ monetizes its investment assets and makes them a profit centre, Wall Street will always treat the scheme with caution. They will want to evaluate COMPAQ on the performance of its core business. The reaction of CNBC, Merril Lynch, Barrons and others on the quality of the 19 cents demonstrates this.

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