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

To: Captain Jack who wrote (77507)	2/5/2000 7:17:00 AM
From: rupert1	Read Replies (4) \| Respond to of 97611

Captain and others: The argument that COMPAQ could not manage AV as well as CMGI is specious. AV is currently managed by the same President and staff, with some additions, who managed it when it belonged to (a) DEC and (b) COMPAQ. The difference between now and then is that the CMGI BoD see the value of an IPO whereas the COMPAQ BoD didn't. The argument that AV is an inferior portal and would not have attracted a good price is very weak. AV was 10th or 11th and climbing in the early summer of 1999. Part of the concept was to beef it up by energising it through close links with COMPAQ products and to add value in other ways both before and after the IPO. The history of IPO's in 1999 suggests that it would have raised more than $2 billion and after the IPO the value would have continued to rise. Much weaker properties have done much better on the IPO market and subsequently. But irrespective of the relative standing of AV with other portals, the COMPAQ share price would have benefitted. When the market collapsed the price from $51 to $30 or even $25 following the disclosure about poor performance, it was sustained at those levels by the promise of AV. When AV was sold, the price collapsed to $18. rudedog does get my point about the contribution AV would have made to the COMPAQ culture as well as to market expectations of COMPAQ. Share price is built on expectations. The promise was that COMPAQ was going to become an internet company with an inside track into the promise and the problems of cyberspace through its direct involvement in AV. It was also going to use AV as the nexus of a whole series of interlocking alliances in cyberspace. Abruptly, behind closed doors, this plan was gutted. Recently I have read a lot on boards and in articles about how COMPAQ is seen as a fuddy duddy, traditional company in "old technology" struggling to come to terms with the internet. How differnt things could have been had it retained AV. The value of the CMGI shares are used as a Marxist false consciousness - as an opium for the masses. How often do you see people on this board, who have lost 65-45% of the value of their COMPAQ shares proudly proclaim that CMGI share price is going up and has paid for the DEC acquisition. Fat lot of good it has done them! How much better not to have lost share value in the first place by retaining AV, then to have control of an IPO which would by now be equalling in value the CMGI values, but would also be energising the Compaq classic sales and its share price. Finally, to all those who say "let sleeping dogs lie" - bunkum! It is not a sleeping dog - it is wide awake. The issue of AV cyrstallised the suspicion in the market about the structure of COMPAQ - involving a powerful Chairman able to remove a CEO, appoint himself as CEO for six months, then change company policy, then promote an underling to carry out the Chairman's policies. It raises concerns about the clarity and reliability of COMPAQ's vision and plans. It reinforces the impression that COMPAQ no longer has a leading edge entrepreneurial culture but can move only incrementallly to upgrade itself from its past. The market is being very cautious about COMPAQ - partly because of its AV about-turn. The shareholders are paying for that caution. Yes, in time COMPAQ will get to $60, but time is money. To forget history is to repeat it.