Calvin....ot...No DELL news...just a CPQ downdraft problem.........
Friday, Apr 9 1999 11:58PM ET
Reply # of 115933
This from James Cramer........ HILARIOUS POST FROM JAMES CRAMER
Compaq's 15 Cents of Fame
By James J. Cramer 4/9/99 5:42 PM ET
Well, I'll be. Can you believe these guys from Compaq (CPQ:NYSE)? Can you believe
it? Why didn't they wait even longer? Why didn't they do it at 6:30 p.m.? Or maybe
during Millennium? Or how about after the Yankees home opener? During the Masters
Finals on Sunday? And give me a break. You miss by 15 cents and you just discover it?
You just tell us now? What were you waiting for? We had so many signs, but these guys
really held out, didn't they? Talk about no credibility. This defines no credibility. OK,
enough with the outrage, especially because I have some out-of-the-money puts that
might turn out to be in the money when this debacle is finished. But my small put position
in Compaq won't make up for the collateral damage that I will be hit with in Intel
(INTC:Nasdaq) and Microsoft (MSFT:Nasdaq), and some of the higher-end PC plays
Monday. Does this incident ever remind us how tough computers have gotten? These
stocks look like quicksand to the Web's asphalt. (Don't forget Compaq is saying
demand is sluggish and competition is brutal, both awful for the industry.) As I write this
I am seeing bids in Instinet for Intel at 127 1/2 and Microsoft at 91. Maybe I am a
sucker, but I am not hitting them. That's too low. Any lower and I would be bidding
instead of talking. However, two points higher and I would be tempted to cut back
because this news will dominate the tape and the papers on Monday. Compaq's terrible
execution can bring the sector down, no doubt about it, even though its imprimatur is
definitely tarnished. In fact, its gloomy guidance will prevail until someone says
something different. (Perhaps on Tuesday, April 13, when Intel reports? Or is that
wishful thinking?) As there will be no Compaq conference call, I'm going home. We will
deal with the mess that Compaq just delivered on Monday, when it will smell just as
bad, as these things tend to get more fetid as over the weekend. Stinko |
