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Technology Stocks : Dell Technologies Inc.
DELL 133.92-4.9%Nov 13 3:59 PM EST
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To: Mohan Marette who wrote (98520)2/13/1999 1:13:00 AM
From: Jock Hutchinson  Read Replies (8) of 176387
 
Dell is poised to tank big time. Think about it. 17 percent growth in unit sales does not mean a corresponding growth in revenue. To the contrary, a seventeen percent growth in unit sales will begin to mean zero growth in revenue. Moreover, with zero growth in revenue, the margins begin to dramatically sink. Let's face it, Dell is a commodity procuct selling at seven times sales. That's goofy with its newfound lower rates of growth.

Do you honestly think that Dan Niles has the kind of power to move a monster like Dell down 12 points in one day? Dream on. There is some serious smart money moving out of Dell.

I also want to make it clear that I am not a big Dan Niles fan. My favorite Dan Niles quote is from September of '95 when he set a price target on MU of 125 for the end of '95, stating that he could not emphasize his buy recommendation strongly enough. By the end of the year, the stock was priced at 35. What an idiot!

Nevertheless, you have a potential for disaster here in Dell. Declining margins. Declining sequential growth for the company. Increased Internet competition. Declining Industry growth. And a stock that is grossly overvalued. Can you say '70s by the end of the week? I can. I went short at the open on Friday--for the first time ever on Dell. The lights are out and the party is over.
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