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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: valueminded who wrote (69254)	10/19/1999 9:06:00 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 132070

Chris - (...Something seems screwwy. How can 1 week of 12 memory price miscalculation (if you believe that memory chips are the only reason for the earnings miss) result in a 10% drop in earnings. It would seem apparent to even the bluntest pencil that something else is going on here. I mean memory makes up what maybe 5-10% of the sale price of a dell computer & we all know that dell has one of the highest gross margins (20+%) and one of the highest average sales prices (~$2000) in the industry, so what gives here ?...) The 5% to 10% number for memory probably no longer holds. While I could look back and find sub $100 prices for 128M of DRAM in old ads, I snapped up a rebate offer for about $230 net a week ago, with quotes well above $300. Regards, Don

To: valueminded who wrote (69254)	10/19/1999 10:39:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Chris, Here are some of the answers, many of which you will never hear on the conference call. Unless they allow Fred Hickey to speak. <g> 1. Memory is only part of the equation. Motherboards, SRAM, and even video chips are also rising in price. 2. Dell says demand is very high for their products. But, read between the lines. Not high enough so they can keep price gouging customers for their high profit margin. 3. I have long maintained that Dell is the highest cost box producer due to their profit margins. They have to keep that profit up to keep the stock up to keep employees working for options instead of cash, which keeps the profit up. This is a small attack, but any assault on that profit margin could be deadly for this bloated stock. 4. Bill Fleckensteing had it right when he reported on Dell's lie-a-thon on the 7th. At the time they said they would know more about any impact in several weeks. Huh! Bill noted that the co. with the fastest turnaround and lowest inventory levels should know within hours. O.K., hours is my word, but weeks? No way. 5. My guess is that a few weeks from now we will see huge insider dumping of this bowwow between the 7th and the 17th. Just for financial planning purposes, of course. <g> 6. My guess is that years of accounting abuse may have caught up with Dell, at least temporarily.