steve,
Isn't it curious that Compaq has dropped so much when it has actually had NO bad news?
The market is worried about Compaq's Asia exposure...
Compaq says that it is only 6% exposed to Asia and the benefits of cheaper components outweigh the losses.
The market is worried that Compaq cannot make money on the sub 1k PCs...
Compaq has said repeatedly that it is making a good return on them.
The market is worried that Compaqs aren't selling and they are stuffing the channel...
Compaq says that inventories are on-target, adjusted for the season and for the decrease in dealers.
The market is worried that Compaq is losing market share.
Compaq has been steadily gaining market share...world-wide market share was 10% in 1995, 12% in 1996, 14% in latest IDC report (if I remember correctly). Packard Bell has been losing market share steadily. And remember, 60% of market share still belongs to "Other". This segment will continue to be steadily eaten away by Compaq, Dell, HP and IBM.
The market is worried that Compaq will miss its number...
As you have said about 50 times, they would look pretty stupid to miss it now, after much public boasting (can we say "class action suit"?).
So why has Compaq's correction been more severe than Dell's? or even Gateway's? Is there any logic here? just institutions locking in year-end profits? or is Mr. Market just being more depressive than usual? |
