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

To: Salah Mohamed who wrote (74454)	12/22/1999 8:13:00 PM
From: rupert1	Respond to of 97611

Salah: Nice argument. Those authors did what we are all doing - trying to deduce what's going on from the little that has been said or published by COMPAQ and rumours in the market about Inacom. One of the more informed posters on the Yahoo Board yesterday claimed that Prudential Securities reaffirmed their BUY recommendation after a meeting/conference with COMPAQ "executives" last Friday. If this is true it puts a large hole in the theory that COMPAQ is being silent because of a new policy of delivering information to shareholders at the same time as analysts - a policy reaffirmed by COMPAQ IR last week. I wonder how the promised "meeting with analysts" mentioned in the WSJ article yesterday fits in with this policy. I suspect that they have been silent because they don't know what the results will be and rather fear that they will be mediocre, at best. If you read all of Capellas comments and the 10K, you could interpet them to mean that (a) cost-cutting, and especially staff lay-offs, is not proceeding as rapidly as hoped/promised (b) the indirect sales method will continue to mean that sales of commercial PC's will operate at a loss (c) that services still represent potential rather than actuality (d) that the reforms being put into place or contemplated will not begin to have an effect on the bottom line until next year. In short, I think Capellas is setting the market up for "I told you so". But if there was a meeting between Prudential and COMPAQ last week and if there is to be an analysts meeting then this might indicate that COMPAQ is growing a little more confident. There have been some positive notes creeping in and for this reason I am tempted to believe they may meet estimates, but I will resist the temptation a little longer because the cautionary comments and the lack of information still predominate. We need more evidence. I don't necessarily think that poor or mediocre results in 4Q will cause the share price to tank. The forward guidance, if given, will be more important. In fact, I think the market needs to know that the reforms are actually being implemented, as promised, are feasible and will start to contribute to the bottom line in 2000. What does concern me about the share price is that COMPAQ results will come very late in January and may be after or just before the market has its widely anticipated correction.