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To: Road Walker who wrote (91058)	10/27/1999 7:18:00 PM
From: Joey Smith	Read Replies (1) \| Respond to of 186894

Here's the HWP warning story posted on Yahoo. Looks like a UNIX Server problem, a-la IBM. Joey Yahoo! News Tech Headlines Wednesday October 27 7:07 PM ET HP Warns Of Increased Risk Of Missing Forecasts By Andrea Orr PALO ALTO, Calif. (Reuters) - Hewlett-Packard Co (NYSE:HWP - news) Wednesday said it saw ``increased risk' of missing its fourth quarter earnings forecast, setting off a sharp drop in its stock price and leading several analysts to cut estimates. The company did not make a formal announcement but confirmed late in the day that it had spoken individually to different analysts, and told them that weak North American server sales could weigh on results for the fourth quarter, which ends October 31. Hewlett-Packard fell $6.25 to $70.33 in regular trade and was the third biggest declining issue on the New York Stock Exchange. Later, in after-market activity, it fell more than two dollars from the closing price. ``The issues remain the same,' Brad Driver, investor relations manager at Hewlett-Packard said in an interview. Driver said that Hewlett-Packard Chief Executive Carly Fiorina had addressed the North American sales problem earlier this month in a conference call with analysts. At that time, Fiorina had described a long-standing problem in the North American Unix server sales force, which had caused that region to underperform Europe and Asia. But she had remained upbeat, saying the company had removed poor performers on its sales force and had a ``decent shot' of meeting fourth quarter earnings estimates. Since then, however, Hewlett-Packard has been unable to make up for the sales shortfall through cost cutting and upside in other business areas, as it had hoped. Driver said Wednesday that last month's earthquake in Taiwan had disrupted PC production and limited the potential for upside in that business. He stressed that PCs were not a problem area for Hewlett-Packard but because of the earthquake, that division would not deliver any positive surprises. Although Hewlett-Packard has not formally provided estimates, Driver said the company was comfortable with some of the reduced forecasts analysts issued Wednesday. ``Why else would we tell them there's increased risk in the quarter?' he said. Indications of the earnings concern emerged gradually throughout the day as analysts one by one reduced estimates. One said that the company provided guidance in response when he called to inquire about the company's stock price, which has been steadily losing ground in recent weeks. The stock is now well off its 52-week high of $118. Gruntal & Co analyst Mona Eriba lowered her fourth quarter estimate to 70 cents per share from 77 cents, excluding the results of Agilent, Hewlett-Packard's test and measurement equipment business which is being spun off into a separate company. Merrill Lynch reduced fourth quarter estimates to 73 cents from 78 cents, and Dan Niles of Robertson Stephens reduced his estimate to 73 cents from 82 cents previously, and slashed its 12 to 18 month price target from $103 to $85. Niles also cited a possible slowdown in spending next year due to Y2K concerns by corporate customers. Hewlett-Packard is scheduled to implement a new incentive-based pay system for its sales force on November 1.

To: Road Walker who wrote (91058)	10/27/1999 7:20:00 PM
From: xstuckey	Respond to of 186894

It is obvious, even to a totally disinterested observer, that today's trading in HWP was NOT based on currently public information. John, Most of it was probably based on Merrill's HWP earnings warning this morning. Best Trading, X

To: Road Walker who wrote (91058)	10/27/1999 7:52:00 PM
From: Diamond Jim	Read Replies (2) \| Respond to of 186894

"It is obvious, even to a totally disinterested observer, that today's trading in HWP was NOT based on currently public information. It is obvious that selected investors had prior knowledge of this information." -- John, Sad isn't it? It almost makes me physically ill. jim

To: Road Walker who wrote (91058)	10/28/1999 8:09:00 AM
From: GVTucker	Read Replies (2) \| Respond to of 186894

John, RE: Selective disclosure Did somebody know about the problems at HWP in advance? Probably. But the game is far less rigged today than it was 5 years ago, and was less rigged then than it was 10 years ago. It really is getting better. I was speaking with one of the most successful hedge fund managers around two weeks ago, a man many have never heard of yet manages multi-billions. He was lamenting 'the good old days' when his best ideas came from sharing drinks with a company CFO. If you knew how to ask the right questions when a guy was drunk, the odds were pretty high that you could get a good tip. Today, it is the rare corporate executive that will breach a confidence in such a circumstance. When there is a leak (as in HWP today), it most probably comes from somebody lower down in the chain who probably has never heard of the phrase 'selective disclosure.' And no matter how much progress we make in information flow, there is nothing we'll be able to do about that kind of situation. In the days before Marty Siegel/Ivan Boesky, everybody on Wall Street knew everything about every takeover in the works. Today, rumors are still out there, but they are far fewer. Again, when a leak happens, it comes from somebody way down in the food chain. The higher level executives just make too much money to sacrifice their jobs for an extra $50 grand or so. The system will never be perfect. That would be dependent on everyone in the world being honest, and that is not realistic. But the system is much better today than it ever has been and is getting better all the time. Indeed, a business such as mine would have never been possible under the old system. I don't have enough money. But today, I can play the game on close to an equal level.