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Technology Stocks : Dell Technologies Inc.

DELL 125.97

-1.0%

3:59 PM EST

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To: Venkie who wrote (127338)	5/20/1999 1:27:00 PM
From: D.J.Smyth	Read Replies (1) of 176387

The SSB report must effectively values Dell at $23 to $25 and it's E-commerce business at $5 to $7 a share in order to arrive at the $30 target which makes their valuation "nascent". A $25 share price gives a $63 billion market valuation to Dell's computer business which is less than about 2.5X expected 1999 sales. In constrast, they give IBM a price target of $270, or a market cap of $244 billion which is 2.7x expected 1999 sales. Since IBM has no distinct internet sector, other than it's own site for it's own products, it would seem SSB is valuing IBM's business greater than Dell's. Yet, it is Dell which has a 40%+ growth rate, is taking market share and has significant opportunity to capture further share in, as SSB states, China, Latin America and elswhere. Their report assumptions must be based more on perception (reflexivity - a Soros concept) rather than potential valuation.

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