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Technology Stocks : Dell Technologies Inc.
DELL 135.98+3.0%Dec 2 3:59 PM EST
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To: John Koligman who wrote (84932)12/11/1998 1:45:00 PM
From: jim kelley  Read Replies (1) of 176387
 
John,

If you deduct the "deferred taxes " from CPQ's current assets, you will see that CPQ's working capital has been adversely affected by the merger. The "deferred Taxes" item seem to be a result of their massive writedown at merger time.

Moreover, CPQ 10Q statement says that CPQ will factor accounts receivable to increase working capital as required. Such factoring will
make the DSO inventory number meaningless.

CPQ has not been able to actually implement it full restructuring and layoff plans yet. It appears to me that this is because such plans adversely affect their working capital. Thus they are stuck with an inefficient operation until they can generate enough funds to complete their planned restructuring and layoffs.

Much of their balance sheet is based on estimated values of intangibles and in process R&D which may or may not produce
competitive products. CPQ is a fiscal mess, IMO. The merger has produced a company that is very difficult to manage and which has
a financial statement which is subject to change at any time.

If the management had a history of being straight with the investors,
I would consider investing in them at an appropriate time. But they seem to be trying to blow smoke all the time.

JK
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