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Technology Stocks : Comdisco, Inc. (NYSE: CDO)
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To: KevRupert who wrote (635)4/4/2001 3:39:34 PM
From: Glenn Petersen  Read Replies (1) of 689
 
"I am shocked."

Me too. My interest in CDO has always been the Ventures group. Given what has happened to CMGI and ICGE, it is probably safe to assume that the value of CDO's venture holdings have become a bit problematic. Add the fact that many of their loans were to "speculative" entities and there are probably some valid concerns about credit issues.

Given that CDO is selling for less than half of its book value, the market is telling us to expect some significant write downs in the near future. In my auditing days, I did a number of technical reviews on leasing companies. Getting a feel for the balance sheet from an investment perspective was always difficult. The entities were always highly leveraged and subject to a multitude of loan covenants. When things start to unravel, they happen quickly. It will be interesting to see how this shakes out as more information becomes available.

I was tempted to buy CDO for a bounce this morning but resisted the temptation.
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