"What secretiveness are you talking about?"
That secretiveness comment was made in response to one by Andreas who remarked that Michael Dell was making sure to frequently share information with analysts, while Compaq refused to do so except at specific functions. My point was, and is, if Compaq is not sharing the way Dell is, they should.
"If they didn't impress the analysts and MM, as you imply, it is totally a subjective matter. Most of the comments I
read about the meeting were positive with the exception of few negative ones. If you think that the $8 drop in the
stock price was due to a bad presentation, maybe you would be able to explain why the stock went up about $6 - $7 points last summer after they announced Q2-99 will be one of the worst in their history, and suddenly reversed to set a new yearly low, and again reversed to go to $33. Obviously, short term price movements are very difficult to explain."
I would be the last person to try and explain the wierd behavior in Compaq's stock price most of the time. But I do believe two things. The run-up to $33 before earnings was due to expectations that Compaq was moving forward aggressively. Also, if you believe the recent sharp drop in price the last two weeks is not related to an inadequate analyst presentation, then I think you're not thinking clearly about the situation. Do you honestly believe that if MC and his staff had won over the confidence of the analysts with an aggressive, winning strategy that the share price would still have dropped off a cliff so quickly, or that 90 % of the analysts who are asked would answer "Don't buy Compaq now."
Analysts came away from the big picture disillusioned to say the least. Sure some made comments that things are starting to turn around, but mostly you hear that MC isn't being aggressive enough with job and cost cutting. And the most frequent comment is "they still have a long way to go."
I'm not saying that Compaq will never make it back, but I think we're kidding ourselves if we believe the turnaround is imminent. Since Compaq is my largest holding, I would like nothing better than to be proved wrong, but I've thrown the rose colored glasses into the desk drawer for now.
Russ |
