Speaking of Scummy Shorts...Why One Longtime Bear (Surprise!) Isn't Bullish on Dell
By Herb Greenberg
Senior Columnist
5/4/00 6:30 AM ET
Thursday thwack:
Dinging Dell -- again!: When Dell (DELL:Nasdaq - news - boards) reports first-quarter earnings May 11, it should have no problem meeting Wall Street estimates of 16 cents a share, "because they set the bar low enough," says money manager Bill Fleckenstein of Fleckenstein Capital in Seattle, who is short Dell's stock. He's referring to what in all likelihood will be earnings that are flat compared with those of a year earlier.
What concerns Fleckenstein, who was quoted here in January accurately predicting Dell's miss of its fourth quarter, is Dell guidance regarding the second quarter. "There's absolutely no way they can get to the following quarter's estimate of 21 cents," he says. "Doing so would require them to be up 10% year-over-year in terms of earnings."
He cites the same thing he's been citing for months: Corporate PC demand has fallen off a cliff. (Not to mention that it's trading at 81 times last year's earnings after two missed quarters and one that is likely to be flat.) He doesn't know whether Dell will guide lower on its postearnings conference call or sometime the following quarter, but he doesn't see how it can avoid doing so. And if they don't, "I don't know whether they'll have Internet wampum (from investment gains) to make it, but operationally, there's no way they'll make 21 cents."
We'll see. In the meantime, please, enough with the emails about why I bother quoting someone like Fleckenstein, who was early in his PC industry concerns. I quote him because when it comes to the performance of PC-related companies, lately he's been on the money! And while we're at it: Don't waste your time asking me to ask him to disclose his investment performance. I really don't care about the performance of his fund; I care about his performance as a source
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