Hi SDNA
Good points, I'd like to add a few also:
I am long on Compaq now for several reasons:
1. To date, their management is the best I have ever seen at investor relations. Watch and see if they don't come out with major good news in the next day or so to counter the WSJ article.
2. Even if inventory hasn't moved as anticipated recently, does this mean that (a) they will lose market share? (b) the long-term demand for computers will shrink? (c) this isn't a good company to hold long-term? I think not.
3. Tandem and DEC are sterling acquisitions which will enhance their global competitive position and product depth while at the same time gaining access to leading edge R&D talent. They also become a bigger fish in a pond with fewer competitors.
4. IBM is, and will be, losing market share hand over fist due to their inability to react to Compaq's ability to make sound strategic decisions quickly. The pressure is now on them to respond.
5. I think Dell and Sun are still viable competitors, and will be for some time, but Compaq has a serious advantage over them with their global ordering and build programs now coming online which will dramatically enhance their ability to reduce cycle times.
6. The future is in home pc's and high speed data links between them. This will create a strong and steady demand in the years ahead for faster systems with enhanced capabilities, and I believe that Compaq is in the best position to take advantage of this demand.
(You bet Radio Shack will help!)
Scuse my bias, but I've been in this business a few years, and feel pretty strongly about it.
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