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To: John Pitera who wrote (60979)	9/9/1999 12:55:00 PM
From: Lucretius	Read Replies (2) \| Respond to of 86076

i'm sure it is nothing to worry about.. buy the dip in CMB

To: John Pitera who wrote (60979)	9/9/1999 3:58:00 PM
From: wlheatmoon	Read Replies (1) \| Respond to of 86076

storage technology is in the news. Sep 09, 1999 Stop the Presses: Dell Makes an Acquisition Dell Computer (NASDAQ:DELL - news) plans to do something it has never done before-buy another company. The PC company is swapping 6.9 million shares (worth roughly $340 million) for privately-held ConvergeNet Technologies of San Jose, Calif. ConvergeNet is a storage networking company that focuses on enterprise data storage technologies for what's known as Storage Area Networks (SAN). The company's yet to be shipped product-estimated for the first quarter of 2000-is a hardware and software product which allows different storage systems to communicate with all types of servers, regardless of operating system. This acquisition is proof of Dell's commitment to become a market leader in the $38 billion storage market, a market in which International Data Corp. predicts that Dell (before the acquisition) was poised to become the sixth largest vendor. With this acquisition and the company's aggressive management team, Dell is positioning itself to push into the ranks of the top three: EMC (NYSE:EMC - news) , IBM (NYSE:IBM - news) and Sun Microsystems (NASDAQ:SUNW - news) . One appeal: ConvergeNet's management and development team offers many years of experience at companies such as Hewlett-Packard, StorageTek and Sun Microsystems. And many of the developers are known for their skills in critical technologies. Given the fact that the SAN market is just now emerging, we believe this acquisition was an important strategic move by Dell to signal its intentions in the market. We also believe that EMC's planned acquisition of Data General (NYSE:DGN - news) , both of which provide storage technology to Dell, drove Dell to look for alterative sourcing. From a financial standpoint, this acquisition is no big deal. Upon completion of the deal, probably within 60 days, Dell will take a one-time charge of approximately $135 million ($0.05-$0.07 per share) for purchased in-process R&D, with goodwill to be amortized over a seven-year period. On a worst case basis (added expenses, goodwill and share count with no revenue stream), this acquisition would result in annual dilution of less than $0.02 per share. No big deal, given that Dell is expected to earn $0.76 per share for the fiscal year ending in January 2000 and $1.03 in fiscal 2001. We remain very bullish about Dell's outlook going forward. This move into the storage market, one of the four incremental growth opportunities previously outlined by Michael Dell (the others being geographic expansion, an expanded service portfolio, and increased sales to the consumer PC market), leads us to think that we could see Dell make additional acquisitions in the future. We also believe that given how quickly Dell capitalized on this growth opportunity, we will be seeing similar moves in the other areas outlined by Michael Dell. Analyst: Will Frankenhoff Updated 9/9/99 with Dell at $48.50