What's this rumor about IBM merging with Compaq? Has anyone else
heard this from their brokers? I have the same broker for 10 years,
this is what he got:
Recently, Compaq is seriously into swallowing other companies:
1) they bought "Netelligent network products" from whatever Cornard
corporation.
2) Immediately after that, they bought Tandam, now called "Tandam, a
Compaq Company."
3) Right after that, Compaq bought DEC. Where does Compaq get all
these money?
4) DEC just layoff 15,000 employees, clearly the merger is almost
finished.
5) So happen that HP dropped $11+ in one day. IF the rumor is true,
HP stock is going to nose dive.
For all intended purpose, I only assume this is just a rumor, and we
should treat as such. However, in their computer
industry, it seems they love to buy out the competition instead of
defeat the competition, we have:
Mr. Gates trying to buyout Intuit/Quicken, but rejected by anti-trust
act, CA bought out Cheyenne, Symantec bought out their competition
Central Point, Seagate bought out Conner, etc. the list is long and
distinguish.
The rumor is, if you were the last two companies exists, then
you cannot merge, due to anti-trust act. So we have, HP, Dell, IBM, &
Compaq. With IBM controlling Lexmark the printer division, and
Compaq/IBM running the computer division, they can literally hammer on
HP, both the HP computer products and HP printer product. If they do
it now, anti-trust can't do much, if say, Dell and HP is gone somehow,
they they can never merge.
I get paranoid that this rumor exists because the patterns fits. The
rumor started just after HP dropped $11+, simultaneously just after
DEC layoff 15,000 employees. On top of that, IBM and Compaq believes
in channel selling, they have distribution channel, wholesale, then
retail, whereas Dell has always been a basement outfit in California,
no distribution, no wholesale, no retail, just direct sales. In
short, IBM/Compaq no doubt hated the"method" of Dell. So a merge like
this, make sense. It is one hell of a blow to Dell as well as HP.
Can I hear a second opinion? 1998 is one hell of a merger year, isn't
it? Right at the beginning of the year, we have Royal merging with
Bank of Montreal, CIBC merging with TD, Nova merging with TCPL, Compaq
merging with DEC, how many more am I going to see before Christmas?
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I captured the above message from Misc. Invest. Canada. Anyone else
seen this before? |
