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Technology Stocks : Dell Technologies Inc.
DELL 122.55+4.4%Nov 21 9:30 AM EST
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To: Boplicity who wrote (31132)2/26/1998 4:36:00 PM
From: jim kelley  Read Replies (2) of 176387
 
Greg,

CPQ BTO is way off track. With the acquisition of DEC they are even further off their original game plan than before. Bottom line they can not compete with DELL for long. Their actual inventory pipe is closer to 16 weeks not 8 weeks. So they have changed the game plan and are moving upstream into the IBM arena as Paul levy and others have noted.

I expect them to "slice and dice" the DEC businesses- spinning off some of them and shutting down other unprofitable parts. Likely to be massive layoffs which will cost them 1B in restructuring charges.

IMO, CPQ stuffed the channels and converted them to sales by changing their contracts with the channel. Then they turned around and factored the paper to convert it to profits for last quarter. This jacked their share price up for the purchase of DEC. They also fired 4000 of their dealers who were sitting on the CPQ inventory.
CPQ is becoming increasingly difficult to analyze because of its many divers business units and all the acquisitions.

It will be very interesting to see next quarterly report. For DELL this is very good news! DELL basically has won this particular game through its focus and its near perfect execution.

I predict CPQ indigestion for the rest of this year. Lets see what Ekhard can make of his new baby Huey!
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