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

To: E_K_S who wrote (69980)	10/25/1999 9:39:00 PM
From: rupert1	Respond to of 97611

Jim Kelley is talking about DELL's "manifest destiny" on the DELL thread this evening. Oh dear!

To: E_K_S who wrote (69980)	10/25/1999 9:43:00 PM
From: steve kammerer	Read Replies (1) \| Respond to of 97611

If it's not too late, I want to use my post # 68885 on 10/14 for my estimate of ($.13)/share with price at 20 1/4. The price has dropped in expectation of low earnings already. stevek

To: E_K_S who wrote (69980)	10/25/1999 9:47:00 PM
From: Captain Jack	Read Replies (2) \| Respond to of 97611

<<"900 million charge for layoff's">> About 8 qtrs of profits.. or 2 years for payoff,,, sounds hihj but look at what EP received,,, takes a lot of boxes and services to pay for these people,,, still seems high for 8K,,, tomorrow night,,, overall that would be a loss of about .55???

To: E_K_S who wrote (69980)	10/25/1999 9:58:00 PM
From: rupert1	Read Replies (2) \| Respond to of 97611

Eric: The proposed write-off of between $700-900 gives COMPAQ lots of scope to "cook the books" in the nicest sense of the word. I have seen a suggestion that the operating profit and the write-offs will be counter-balanced, and the net effect will be an EPS manipulated to be right on .05 cents or no more than a couple over. As long as it is at least .05 cents, the market's interest will switch to the forward guidance. You are absolutely right to point out how quickly valuations can change when cost-cutting is taken into consideration. But, as your also suggest,the cost-cutting must be seen as a re-allocation of resources away from relatively unprofitable lines to those with high rates of growth within a coherent plan. The market will anticipate increased and sustainable profitability and award a higher forward-looking p/e. I would suggest this would start to happen in a modest way as of Wednesday, but progress wil be in fits and starts until midway through 2nd quarter. Assuming execution has kept apace of the plan and assuming that 2000 is, as anticipated, a good environment for tech sales, I could see rapid acceleration in the share price from the 2nd quarter to the $40's and a successful assault on the old highs by the 3rd or 4th quarter.