Compaq Message Board - Msg: 9321815

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Technology Stocks : Compaq

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To: Jimbo Cobb who wrote (60484)	5/4/1999 8:49:00 PM
From: steve kammerer	Read Replies (3) of 97611

Could someone on the thread explain how CPQ is valued. For example, before the runup to 50 CPQ would go up and down by maybe 1/4 with 18 million shares trading. It hung at maybe 29 or 30. Then there was a transition going up to eventually 50. When the drops happened, there seemed to be 2 sudden drops, the last being from around 31 to 22 area. It didn't overshoot to 18 and then over shoot to 25 and gradually settle. It seemed to drop when earnings shortfall announcement was made right to around current price. This may be naive but how is it determined that that is the price it should go to? It's more than just supply demand. There is some model that is valuing CPQ at a certain price and buying occurs when it tries to go below and selling when it tries to go above. I am NOT talking about any kind of conspiracy or manipulation. I have been wondering what makes a large investor sell to a certain price on bad news. I used to thing it was DCF of future money streams but that only works if you really own something. We have no control over what is done with the money streams. Any comments? Stevek

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