To: kemble s. matter
From: arthur pritchard Tuesday, Nov 24 1998 12:57AM EST
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Dear Kemble: I thank you for your post! My concerns primarily are the frightening flow of capital into the internet stocks. The rate of flow, and the size of the flow are without precedent in the history of business. If we can discuss possible reasons why this is happening, it might generate ideas for Dell! Before I had to "retire" from the computer industry to take care of medical problems in my family, I had worked for two "think tanks", one in the Boston area, and another near Stanford University. That was a long time ago, but I will never forget how quickly good solutions developed, by getting together persons of extremely different backgrounds. And I will never forget the pace of work, the pressure, and the quality. That was all before even Bill Gates. Since those jobs, even though I was unable to directly participate, I never lost my passion for what was happening with hardware/software. I want you to believe that my criticisms here are meant to be constructive. If I had had a different life, I would undoubtedly still be working with a team,"pushing the envelope" somewhere. My complaints on this thread, are meant to turn up the heat, and create more of a sense of urgency! I usually do not know how to do this "gently", because I love to "put it all right out there", especially when writing. My purpose is to stimulate accelerated thought. My purpose might at times be to put pressure on Dell. I'm sure they appreciate the points discussed here. Please don't confuse my comments which at times may seem to indicate lack of respect for all that has come before me here. My main bias is that we must discuss thoroughly here the issues of valuation of Dell, and how we might press management to interface more energetically with Wall Street, about the value of Dell vs. the internet. Instead of waiting for Wall Street to "understand" that Dell is an "internet stock" which actually makes money, there is nothing bad or negative about constantly asking Wall Street what we can do to improve. I know i'm writing very simplistically, but the company needs all the feedback it can obtain, and I assume that this particular thread is one of the very best feedback mechanisms for a business of any kind, which has ever existed. I remember that when we "brainstormed", that there were no "rules". That it was o.k. to say it the way you were thinking it, even if it was half baked, and even if it did not come out looking like something that Chuzzlewit wrote! From my brief experience here, I can "feel" some holding back. This causes me anxiety, because I believe we have a valuation crisis. Several persons have addressed this, some more directly than others. It would be a great shame if this thread, through more aggressive brainstorming, could have helped the company Dell, but we were afraid to put it right out there. We held back. Don't say it unless it's just right, that sort of thing. Frankly, I don't care how capable the executves are; this is not relevent to whether we can't increase our own contribution. In my opinion, the ideas which are tossed around both within and outside of the corporation in the next six months, will determine the destiny of Dell. Regardless of how impressive the accomplishments of Dell may seem to you so far, we are now in a whole new world. When capital moves at the rate that it has been moving, we are in a new world. We need to understand what is happening, and do what we can to help the corporation. The valuations and mergers taking place, are being done at a pace several times the pace of even Dell. And there is no going back; it will never all retreat. So I sincerely apologize in advance for my future writings, because I am extremely anxious that just the right persons within the corporation, get just the right ideas, at just the right time, and pass them on to others in ways that generate explosive returns---both in terms of money, and in terms of the highest level of ethics a company can have. Given the quality of Dell, I continue to find Goldman Sachs having inside information from our board, and then competing in the market as a market maker to be an extremely blatent basic violation of ethics on many levels.
We're all under family pressures now, because of the holidays, so I won't go further. Thank you for your understanding of where I am "coming from". And with great respect for everything you mean to those here...arthur
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