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Technology Stocks : Compaq
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To: Eddie Kim who wrote (24498)4/16/1998 3:03:00 PM
From: James Cotton  Read Replies (1) of 97611
 
CPQ never stopped stuffing from last year. It never achieved 4 or 5 weeks inventory. Thus when Q4 stuff came it put them over the top over 10 weeks. CPQ's goal of 2-3 weeks by june time frame does not add up either. CPQ would have to loose $1 billion in sales or 1 1/2 or 2 months of inventory.

CPQ will buy the inventory in a write-off on the DEC acquisition including some off the balance sheet financing of inventory. So the answer to your question is the the stuff was huge, the solution is write-off.
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