Nilesh Parikh;
First, we may as well forget about the so-called 1 billion buy-back. I'll be surprised, given past experience, if anywhere near 1 billion dollars is actually spent. Furthermore, what better time to implement the buyback than yesterday and today? And was it? Judging from the stock's behavior (dropping 4 bucks) I seriously doubt it. Don't forget 1 billion dollars equates to about 50,000,000 shares!!! Even a minimal (say 15%) implementation would have absorbed 7,500,000 shares of yesterday's volume. Additional demand yesterday to the tune of 7.5 million shares would probably have caused the price of cpq to go up, rather than dropping by $4 or more!! In other words, the buy-back is baloney, unless it is actually implemented. And so far, it doesn't appear that it has. And if management didn't take advantage of yesterday and today to buy back stock then imo, they never will!!! In conclusion, the announcement of buybacks being authorized is just window dressing designed to allow form rather than substance to mitigate a free-fall of one's stock. End of story.
Second, I agree that IF cpq expects a shortfall they should come out now rather than later. However, imo, MC would not have been so certain about Q4 in prior reiterations if there was any reasonable likelihood that a warning may later be required. Comparisons between aapl and cpq or gtw and cpq are ridiculous! cpq only derives 19% of its revenue from consumer p.c.s In fact, imo, cpq should be compared more closely to sunmicrosystems than to a so-called competing box-maker, for obvious reasons. Where would cpq's stock price be if it enjoyed the same p/e as sunw? C'est la vie! |
