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Technology Stocks : Compaq
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To: Rockemsockem who wrote (10597)12/9/1997 9:32:00 PM
From: Dwight E. Karlsen  Read Replies (2) of 97611
 
What is CPQ's asian exposure?? If significant, could be a problem....

Naww..Look at COMS...they just announced that Asian sales went from 50% growth to zero. That's right out of the Senior VP for Marketing's mouth, to C/Net. What happens? Stock goes up 6 points in just 4 sessions.

If CPQ gets this Asian flu, they should take a clue from COMS on how to handle it without taking a stock hit: Announce an inventory model improvement program. Get down on your knees and admit your prior model had too much inventory in the channel. At the same time, announce you are implementing state of the art EDI (Electronic Data Interchange) system to monitor future channel levels. By this time WS will be so impressed with how really progressive are your initiatives, that they will be desparate to buy your stock. Asia? The analysts won't even remember anything about Asia. It's all about inventory remodeling. A side benefit is that you say you are holding back sales in order to bring channel inventory into line with what you want. Those silly analysts will be out-doing each other: You'll see them adding hundreds of millions of dollars to the actual sales figure you give them, trying to guess what your "real sales" out of the channel were.

It's a win-win situation. If Asia gives you lemons, just make lemonade. WS loves this stuff.

DK
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