Rosemary - I have not heard anything about SGI/CPQ in the press, it's just that it was brought up here by someone, and I also was thinking about it. I think these things come up in regard to CPQ because of it's cash hoard, and because of the fact that they have been on the acquisition trail. The DEC rumor is one I have heard before, and without DEC's foundry, that one might not be too bad a fit, as CPQ basically would obtain DEC's skilled 'warm bodies'. Remember in the recent past every time some tech company would crash, thread talk would center on 'will IBM now buy it'. This occurred with Bay, and still does with Novell. Since too much cash on the balance sheet is perceived as a 'negative' (as an example, compare Microsoft's growth rate with what they get on their cash), most folks expect CPQ to put that cash to work one way or another. They will either do more acquisitions (most likely in my opinion), or start buying back stock. I think stock buybacks are less likely as it would be an admission that CPQ cannot grow via other methods. Look at IBM, they report better results primarily through financial engineering, such as stock buybacks and personnel cutbacks. Other than their services area, they have not shown much growth, around 2-3 percent yearly.
John |
