Some answers which should please long-term investors!
NOTE: This was posted to Yahoo Dell Club Site by another. Posted here for info.
This a reply I got from Dell IR to some questions I asked concerning a number of topics which I've seen on this board.
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Subject:
Value etc.....
Date:
Tue, 15 Dec 1998 18:22:53 -0600
From:
<Doug_Thiessen@Dell.com>
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Dear -------,
I work in the Investor Relations department at Dell and was recentlyforwarded your email. Please see my answers below each of your respective questions.
Again, thank you for your interest in Dell and please contact me directly if you have any further questions.
Doug Thiessen
Sr. Investor Relations Analyst
Dell Computer Corporation
512-873-0631
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From: --------------------
mailto:---------------
Sent: Friday, November 27, 1998 2:44 PM
To: Investor_Relations_Fulfillment@exchange.dell.com
Subject: Value etc.......
As a shareholder I'm completely dumbfounded by the lack of performance of DELL since its earnings report. I realize the numbers were good but to be hammered so much is something I cannot understand and disturbs me and I'm sure a great number of investors who have placed their faith in DELL and what DELL has come to represent.
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1.) What is DELL doing to increase/maintain shareholder value ?
Dell continues many strategies to increase shareholder value.
First, we continue our migration and use of the Internet. This provides our customers with the ability to enhance their procurement processes while saving dollars and allows Dell to also streamline its processes while making them more efficient. We are also working toward getting our supply base directly hooked up to improve information flow to them as well. We all win.
Remember that we announced that Dell is doing over $10 million per day over the Internet.
Second, we continue geographic expansion. We recently opened a new Customer Center and Manufacturing facility in China and have announced a new manufacturing facility in Brazil. Our competition may have up to 50% of their revenues coming from international resources. Dell only has about 30% currently which we believe is a huge opportunity for us and one that we are trying to take advantage of.
Third, we continue to enhance our product mix as we move more into the enterprise space. Again, our competition is getting between 30-40% of their revenues from the enterprise space whereas we are only getting 14% of our revenues from these products. We believe that our current offering of products for workstations, servers and storage will provide us with the opportunity to grow in this area.
Finally, technology changes such as broadband communication, Office 2000 and Windows 2000 along with Y2K issues we believe will provide room for future industry growth of which Dell has historically led the way.
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2.) Is DELL continuing their buyback program at these levels ?
Yes, Dell continues to buy back shares to also increase shareholder value.
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3.) Why don't I see as much DELL TV advertising as with your competitors
(Gateway primarily)?
( An aside: After I wrote this I've seen dozens of Dell commercials.)
I'm not sure that if you've been watching TV lately you would make this same statement. Dell continues to build its brand and we have been very visible in doing so.
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4.) Why hasn't Mr. Dell been on TV since earnings to let all know what's going on with various strategies & remedies to reverse the current trend ?
The commentary Michael made on TV after earnings is the same
commentary he and our other executives are making today. You must keep in mind that Dell's stock price is affected by more than just Dell commentary and therefore trades every day based on these other factors. Our story remains the same.
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5.) Don't you think Mr. DELL is setting the bar a bit too high & allowing the "analysts" to expect more of DELL than it's capable of delivering ?
Let's be very clear of one thing. Analyst expectations are their own. While influenced by what Dell people say, the ultimate expectations an analyst develops are based on his/her own research and models and whether or not they see the same opportunities the company sees. Two or three years ago you would have asked me the same question, "Is the bar a bit too high".
Ultimately, I don't know the answer to that and only time will tell. But overtime Dell has delivered value to shareholders and we believe that we have many opportunities ahead of us. Again, we will leave the projections to the Wall Street analysts.
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6.) Why does everyone seem to be preoccupied with the insider selling of DELL shares ?
Could there be something to this or some sort of correlation as to the stock slide ?
In many companies, analysts and investors view insiders selling or buying as a company who has reached its high or low point, respectively.
With Dell, the insiders sell every quarter as part of their regular diversification of portfolios. Remember that part of our executive compensation is stock, meaning that they only benefit if they have created value for all shareholders. Trading occurs every quarter during a set window (time period). All of this is done so that the markets can't use insider trading as a basis for determining a high or low point. |
