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To: Sam LBI nj who wrote (33234)	8/4/1999 12:39:00 PM
From: Susie924	Respond to of 44908

OK I'll bite. What's ALSOS?

To: Sam LBI nj who wrote (33234)	8/4/1999 12:43:00 PM
From: Fred Thornell	Read Replies (2) \| Respond to of 44908

My bets still open BOYS and GIRLS, here is a piece about Mr. Dell "More on Insider Practice These types of stories and suspect IPO practices are matched only by one other slimy practice in high finance these days. This is the all too-standard practice of larger cap companies issuing their executives lucrative stock options, and then using corporate cash flow to buy back their own stock, enriching themselves in the process, but also leaving the broad public holding the ultimate bill. Michael Dell has followed such a practice for years now. If you own Dell Computer, you own very little in tangible assets. You own instead a revenue stream, but in an industry where unit sales growth has plunged from over 20% per year to single-digits or less this year, and where price wars are quickly causing profitability growth to turn south as well. You have very little in terms of cash, marketable securities, property, or receivables?mostly because the bulk of the company?s cash flow has been plowed back into stock repurchases. In early 1995, Dell?s stock price on a fully adjusted basis was about $1.5. Book value was almost 50 cents. Today, with Dell trading at 82 (down from 110 just a few weeks ago), book value remains a paltry $1.15. The stock is thus trading at almost 70 times book value, and a lofty 70 times earnings. Throughout history even the best of companies have seldom traded more than 2-3 times book value. In the old-fashioned Graham & Dodd fundamental methodology of investing, stocks were rarely viewed as a compelling investment unless they could be purchased under book value. Dell may have declined some 25% since late January, but its overall valuation remains a joke. What Michael Dell has done is create a brilliant company, but then turned its valuation into something akin to a Ponzi scheme. Dell?s corporate treasury has repurchased over 350 million of its own shares in the past three years, but despite these repurchases (which should normally have driven the book value of the remaining shares higher), the total number of shares outstanding has gone down only marginally (by only 63 million shares to be precise) and book value has barely budged. What has happened (and here we quote from Fred Hickey of the High Tech Strategist newsletter to whom we owe much of this insight) is that over time ?cash from Dell?s PC operations came in the front door, and the majority of it went right out the back door to employees, including Michael Dell himself.? Between August of 1997 and present Michael Dell personally sold almost 10 million shares netting himself over $810,000,000, the largest chunk of which he threw on the market on both August 21, 1998 at the height of the Russian chaos and then again on September 24, 1998 when the market afforded him a small bounce. He must have been nervous that the game was up and it was time to head for the exits. But then Alan Greenspan saved everything, and Dell vaulted higher yet again. Barely a short would be left in this stock (or the Nasdaq 100 to which it belongs) by early January. As the stock price has moved higher and higher, and even with $1.4 billion in earnings from the latest twelve months, the company has had insufficient cash to repurchase the same number of shares. In modern American finance, this is not a problem though. In 1998 Dell sold a huge amount of corporate debt to keep the corporate coffers sufficiently full for the stock-buyback program. Michael Dell is surely more savvy than either Herbert or Nelson Bunker Hunt, but is not this type of behavior somewhat similar? The basic game is to use other people?s money to leverage up an asset you believe in. The only major difference is that Michael Dell has refined his exit strategy far better than was ever afforded to the Hunt Brothers by the New York Comex Exchange."