Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: rupert1 who wrote (69944)	10/25/1999 5:40:00 PM
From: Andreas	Read Replies (1) \| Respond to of 97611

To Victor; It doesn't really matter. If you leave in the two I took out the average price drops to 19.04 rather than 19.05.

To: rupert1 who wrote (69944)	10/25/1999 6:02:00 PM
From: Steve Lee	Respond to of 97611

Sure I'm serious. But I'm not short. I hold puts and calls in the expectation of a move in one direction or the other. When investing, I base my decisions on technicals. The technicals until today said down, now it looks like a base is forming. When the news breaks, so will the stock, one way or the other. From a fundamental point of view I reckon the direction should be down. I say that cos they have built their business on charging a hefty premium for the best products. That was in the days when each PC support problem was dealt with in a costly way by an engineer visiting and tackling the problem until it was solved. Cost of ownership was linked to reliability of the machine. These days configurations come from the central site and PC's are cheap so when they fail they can be thrown away. Who cares if your PC tells you when it reaches 33 degrees celsius? Who wants to pay a 100% premium for the privilege? OK, Compaq are holding onto their server market share better than they are with the workstations, but as PC clustering advances, and the likes of DELL now produce serious servers, Compaq will eventually lose market share there too. The harsh reality is that Compaq's products have been commoditised. Their results this quarter will be hit by: 1) Lower selling prices due to increased competition 2) Lower market share 3) Poor-availability of products, such as the flat screen monitors, fibre channel equipment 4)Rapid devaluation of stock due to accelerated product rollout plans (SCSI III - SMART 2 disk format change) SMART 3100/3200 array controllers, discontinuation of ProLiant 7000, intro of 6400, 8000, discontinuation of 14" flat panels in favour of 15" models, lower processor life cycles 5)Higher component prices 6)Corporate spending freezes due to Y2k worries 7)The charges warned of in last quarters report ($700k -$900k) 8)And who knows how much the 820 chipset farce cost them?