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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (136810)	7/16/1999 12:36:00 PM
From: D.J.Smyth	Respond to of 176387

Chuz, what may work out idealistically on paper may not work out financially. It's difficult to see how CPQ could afford GTW at this time. They'd need to offer at least (the very least) a 35% to 40% premium to get it. They'd need to both increase the number of shares outstanding to handle it (dilution), use cash, and use bonds; all three of which would intermediately decrease earnings potential. Closing off the CPQ net channel to use GTW would also result in charges - and under the new accounting rules could further dampen immediate earnings. They may find that instead of increasing the sales of both units, that sales of one would simply be replaced by sales of the other - thereby increasing the Dell opportunity.