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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Elwood P. Dowd who wrote (68887)	10/15/1999 8:04:00 AM
From: rupert1	Read Replies (2) \| Respond to of 97611

El: My prediction of $55 by end of year (not Christmas) was made at a time when CPQ was either giving formal assurances (or appearing to support the general assumptions in the market) to the effect that (a) the merger with DEC was on schedule (b) that Alta Vista would be floated in the Fall, 1999 (c) that there was a world-wide search for a highly experienced new CEO and an external candidate would be the most likely choice. Had any one of those three assurances been true, my prediction could have been fulfilled. None of them were true. I notice that none on this board has a firm idea what earnings will produce and most are still trying to read the entrails of uncertain PR pronouncements. Your own prediction of the price about doubling from about $25 by the Spring/Summer 2000 appears to be based on the same blind faith that has kept you in the stock over two years as it has proceeded from $35 to $21 to $51 and back to $19. Your prediction seems to be unaffected by changes in the information proceeding from the company. So is it $45-50 by Spring/Summer 2000 irrespective of whether the DEC merger was on schedule, or whether they floated Alta Vista or whether they got a high-profile CEO or an insider? My prediction now is this: 1. If the general market corrects another 5%-10% (which I think is possible), if CPQ does not meet expectations or if it announces further disruptions to the 4th quarter due to Taiwan or YK2, and if it concedes much larger loss of market share to competitors, or substantially reduced margins, then I think the price could dip to $15 but more likely $17. I would think it would recover quite quickly to the $21-24 range. 2. If it meets or beats expectations, gives credible re-assurances that the Taiwan interruptions are not material to 4th quarter results and gives a generally credible and upbeat prognosis for the 4th quarter and 1st quarter, then I could see the price moving very quickly to $28. After some backing and filling I could see it moving towards $35 or higher by the year-end. I would just caution that I do not think a good rah rah speech by MC would be sufficient - there would have to be some quantifiable, verifiable content. So, assuming the conditions in #2 prevail, then I only need to change one digit in my original prediction of $55.