SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Compaq
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Mohan Marette who wrote (15028)1/26/1998 4:05:00 PM
From: Steve Porter  Read Replies (1) of 97611
 
Mohan,

Thank you.. (at least someone is starting to understand where I am coming from). You see I am just wondering what the total bill for all this will be.. I'm thinking something like this:

9.6B -acqusition price
?.?B -lost interest (who know how long it will take to get back 6b in cash)
2.?B - lost productivity due to integrationg concerns.
?.?B - lost agility due to tremendous and sudden size increase
?.?B - lost productivity due to employees worrying about their job (this is a real problem.. easpecially on the DEC side)
?.?B - cash needed for early retirmen/buyouts..
?.?B - charges for closing/mergin redundant operations..

As you can see there are a lot of ?'s there. The other thing to consider that's I didn't include on the list is ?.?B for companies that like DEC but DON'T like to deal with CPQ. Sure DEC has $13B in revs, but what if $3B of that doesn't want to deal with CPQ and moves to IBM.. all of a sudden it's a really bad deal.

When EP said accretive by the end of the year, I bet he was talking along the lines of about $4 to the bottom line.. So you have to figure he and the CPQ managements must be putting the bill around $11b-$12b this year alone for the acquisition, with probably another $4B next year.. that's a log of money for what could be significantly less that $13B in revs..

Steve

Cyrix/NSM RUle!
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News