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Technology Stocks : Dell Technologies Inc.

DELL 133.20

+5.7%

Nov 26 3:59 PM EST

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To: Mohan Marette who wrote (123166)	5/7/1999 4:00:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Hi Mohan, I think there are really two reasons to consider GTW a good strategic acquisition. First, GTW is a potential BTO bridge for Dell's competitors. That is, they could use the GTW brand as a way to avoid a channel rebellion. There is mounting evidence that such a rebellion is hurting Compaq. Purchasing GTW takes that option away from companies like CPQ and HWP. Second, Dell is not well-positioned to market to the first time buyer. Naive consumers need to touch and feel the product before buying. The country store concept allows for that approach. The name of the game is not increasing margins, it is increasing gross profits. So long as you can make investments that yield more than your cost of capital you are deploying capital properly. TTFN, CTC

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