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

To: rupert1 who wrote (73733)	12/13/1999 10:21:00 PM
From: PCSS	Respond to of 97611

Looks like CMGI is UP another 6+ to 218 in afterhours .... sooner (or later) this has to postively effect CPQ Michael

To: rupert1 who wrote (73733)	12/13/1999 11:52:00 PM
From: Night Writer	Read Replies (2) \| Respond to of 97611

victor, What you described is an LBO. An LBO only works when the sum of the parts is worth less then the parts. I know about arbitrage. Selling at a present value price that would vary depending on the closing date. That really doesn't happen right away on big deals. It does on small deals. Think about it. FTC approval, JD approval, European approval of some type. First, if you are going to buy CPQ, you don't mess around with buying 5% before sitting down with management. Amateurs do that. Second, most companies subject to an LBO want the LBO for various reasons. One of the reasons is that they can unload tons of stock or stock options at a good price. The old hostile LBO doesn't happen very often anymore. You hit an area I have experience with. The goodwill in the Compaq name alone is worth $20 to $30 a share. Let's say $25 a share. El's mild review of investments reveals another $6 or $7 billion. Cash is about $4 billion. That is roughly about $7 a share. That brings us to $32 without even touching the core business or intellectual property. Do you want to sell the core business for $18? Stop and think like a business person. In an LBO, you don't want to pay any goodwill. If you pay for the brand name, the sum of the parts is worth more then the parts, and that is a money loser. After all, in an LBO you want to use the company's money to pay for the stock not your own. NW

To: rupert1 who wrote (73733)	12/14/1999 12:04:00 AM
From: Captain Jack	Respond to of 97611

Vic-- 50 would be a miracle. I played COMS, CS, NN, and PIOS all for the probability of a buyout as I did FORE earlier this year. All are black,, some obscenely so... and PIOS barely so,, 50 for CPQ would see the price run close and it would be time to bail,,, the arbs can have thec last 5% - 10% there are better playes at that point. CPQ is worth much more in pieces than as a whole. IMO it probably always will be as it is such a huge boat to keep on course. Tough to move, turn, or slow when the need arises. No matter how hard it tries to cut back an org this size needs a small full time cutting room. There are always adjustments and managers understandably try not to make those decisions. As fast as technology moves positions change. Often it is not a matter of wholesale firing but of redistribution of resources. Yes,, tell me 50 and at 47 someone can have it all,,, as mentioned earlier it could be worth much more in a year but remember it could be 18 then too as recently proven,, who would have believed that a year ago???