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Technology Stocks : Dell Technologies Inc.
DELL 133.20+5.7%Nov 26 3:59 PM EST
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To: Chuzzlewit who wrote (85727)12/16/1998 6:27:00 PM
From: robbie  Read Replies (1) of 176387
 
They say so in their 10-Q

Do you mean this - 'Compaq currently expects to fund expenditures for capital requirements as well as liquidity needs from a combination of available cash balances, internally generated funds and financing arrangements. Compaq from time to time may borrow funds for actual or anticipated funding needs or because it is economically beneficial to borrow funds instead of repatriating funds in the form of dividends from Compaq's foreign subsidiaries.'

That is a disclaimer in my view - a statement that if they want to borrow they will. Anyway, it's amazing that Compaq can buy a company for 9.1B and not borrow money.

Your cash flow numbers are misleading too. For 9 months cash flow is 700MM, but if you add back purchases of businesses net of cash of 1.413B and treasury stock purchased of 208MM you get a yearly run rate of 3.1B, which would be enough to pay off the charges you mention easily. Expect it to be much higher. Cash generated last year for 9 months was 2.8B, without Digital. Don't forget the $4.4B in the bank now, which is about the same as the working capital number.
So I say lines of credit are in place for acquisitions and as a buffer.
But you are right, it's possible that they will be used at some point.
No big deal there either, although again I agree with you that the stock could take a short-term hit. If that does happen it will be a great buying opportunity, since the stock will ultimately trade on its long-term fundamentals.

Robbie
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