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Technology Stocks : Compaq
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To: Elwood P. Dowd who wrote (57103)4/12/1999 5:45:00 AM
From: rupert1  Read Replies (1) of 97611
 
Elwood: EP said things last night which are important. He has partially filled the void left by the Mason announcement. His claims will affect the eventual price of the shares today and during the week as the market comes to grips with his statements and pursues them at Innovate.

Many in the market are resisting what he says (i) because of his crediblity problems and (b) because they don't want to believe that some of the COMPAQ shortfall was due to general market conditions. They have a vested interest. They want to get out of other tech stocks before they fall, not after.

They want to believe Michael Dell and disbelieve EP (and who would blame them). But EP is under the microscope right now and his words have to be taken into consideration. He has said that MD was essentially engaged in propaganda, that DELL has also been hurt by market conditions and time will show this.

Of more concern to us he said (a) that costs are continuing to be cut and the previously announced cost-cutting program is on track (b) that the DEC merger is on track but taking time, as all such mergers do (c) he said that the shortfall in sales was 5% and should not be blown out of proportion. (d) he said that COMPAQ maintained market share, albeit at the cost of selling low and losing profit (e) he said that going forward they continued to expect strong growth (f) he also said that part of the problem is the ever-increasing expectations for growth on competitors and COMPAQ alike which causes all companies (and I think he was having a dig at DELL) to fight so hard for market share that they bring down the price of products and hurt profits for everybody.

It amazes me that as we insignificant shareholders were speculating on what COMPAQ might or might not say today, yesterday evening, EP was on the phone again. The day has to come when shareholders get the same information as the analysts and the press at the same time.
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