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Technology Stocks : Dell Technologies Inc.

DELL 133.93

-4.9%

3:59 PM EST

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To: JRI who wrote (153145)	2/7/2000 9:43:00 PM
From: jim kelley	Read Replies (5) of 176387

RE: DELL's situation and the CC I am not expecting DELL's stock to melt down further as a result of the upcoming earnings report. In fact, we have already been told what to expect and I think that will be the performance that is reported (approximately). The CC will not be that important -IMO - because even if DELL is very upbeat their words are not going to be accepted as in the past. Of course, huge news could move the stock up or down depending on whether it is positive or negative. Analyst and other people are going to be waiting to see if DELL is getting its management communications act together. There has to be proof! Credibility has been spent with this huge Q4 miss! DELL badly misestimated the impact of Y2K on their 4th quarter earnings. They also misestimated the impact of the component squeeze on their 3rd quarter results. What needs to happen here is DELL management needs to get back on top of this dynamo. After, misperceiving the impact of the component issues in the third and 4th quarter, the question remains are they continuing to misperceive what is happening? Again words are not enough! It is clear that DELL is investing heavily in businesses outside of DELL. These are largely chosen from among the new crop of startup businesses in the internet and storage systems market. They may also be investing in network appliance companies. These additional investments require a great deal of attention. At the same time their core business is growing faster than any other business its size (25B) has ever grown. This is a dilution of attention. I suspect that what is happening is that DELL's executive management is growing too thin. It needs to be beefed up and processes installed to monitor the course of the business daily weekly and monthly. The events of the last two quarters lead me to believe that sometimes no one is looking for a precious week or two at what is happening. Remember, this quarters miss is about 10 days worth of business. Easier said than done....they might get a Pfeiffer or a Mason on their management team if they are unlucky. <G> There are some signs that DELL may recognize this executive management problem. They have hired Vanderslice and more recently an experienced Investor Relations manager. Unfortunately, they did too little too late in addressing the lack of management depth on the bench. The worse thing that could happen going further would be another huge miss in either direction poorly and tardily communicated. The best thing that could happen is an immediate improvement in communications with the shareholders. I do not expect the stock to do much until confidence in DELL's communications is restored barring significant news events. JMO JK

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