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Technology Stocks : Dell Technologies Inc.
DELL 119.78-0.6%11:40 AM EST
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To: jbn3 who wrote (34222)3/13/1998 3:24:00 AM
From: Bilow  Read Replies (2) of 176387
 
Hi jbn3; Regarding: "While we have a solid level of cash,
we plan to make significant long-term investments in our
infrastructure this year, with capital expenditures in excess
of $300 million. Those expenditures will allow us to expand
our manufacturing capacity in every major region of the world."

I thought that DELL had something in excess of a billion
dollars in cash. (i.e. a couple dollars per share). That would
make spending $300MM easy without having to borrow. I
guess I could go into edgar and look up the data...

Also. To whomever thought that borrowing money will
reduce the price/book: The usual way to increase book
value is to retain earnings. Unfortunately, DELL has
such a high P/E that the ability to make a significant dent
in the P/B is just not there. Borrowing money doesn't have
any immediate effect on book value, since book value is
essentially assets minus debts per share. If on the other
hand, you find something stupid to do with the borrowed
money, the stock price will go down, thereby reducing
price/book. I can't imagine anything smart to do with
borrowed money in the box business right now, it will
be interesting to see what Dell has in mind. It appears
that the amount is in excess of what DELL needs for
capital expenditures, my conclusion is acquisition
preparation. That doesn't mean anything right away,
just that management is collecting up the ammunition.

-- Carl
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