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Technology Stocks : Dell Technologies Inc.

DELL 134.22

-1.3%

3:24 PM EST

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To: Mark Peterson CPA who wrote (129902)	5/30/1999 10:16:00 PM
From: Meathead	Read Replies (5) of 176387

I for one don't want Dell to make ill fated acquisitions just for the short term buzz it would create on the street. I think 14B is a bit steep for the priviledge of disassociating one's self with the boxmaker label. Let me play devil's advocate. Would it be possible for Dell to duplicate this business for considerably less than 14 Billion Dollars? The amount of money were talking here for what you're actually getting at "this point in time" seems absolutely insane. CMGI the business itself looks like it can be built from the ground up for about 200 Million. 14B for a company currently generating 125M yearly revenue... Gigabuys is generating more than that. Ramp up time, intellectual capital, CMGI rights etc... that's another story, but 14 Billion? So, my questions for any expert opinions out there (as I'm not one on this subject) are.... 1. If Dell wanted to be in the same business as CMGI and compete head on effectively, what's to stop them from building the business from within? 2. Are there barriers to entry? Does CMGI hold unique or patently non duplicatable rights? 3. Does CMGI have too much of a lead for any one else with deep pockets to play catch up? I think MD is a shrewd businessman and would not pay anywhere near this kind of insane premium... for 14 Billion, he could rebuild his business 3 times over, or, invest that money in R&D and develop wild new technologies just for the heck of it to see which ones change the world.... could even take on Intel with that kind of cash. You get the picture, 14B is mammoth. Not that CMGI is'nt a company with possibly unlimited potential. It's just still way early in the internet game and the field seems wide open for competition. This type of deal would be highly speculative, generating enthusiasm for IPO's... never a sure thing. I don't think MD is heavily into gambling like this. I agree that some type of acquisition may be imminent and that it must leverage Dell's current business model to some extent. Just don't know what... MEATHEAD

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