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

To: rupert1 who wrote (77560)	2/6/2000 8:41:00 AM
From: PCSS	Read Replies (2) \| Respond to of 97611

victor, <Finally, if you think COMPAQ needed to sell AV to survive ....> 'survive' is the wrong word .... FOCUS & REFOCUS on its core business and new initiatives and cost-cutting was more important. And yes, Rosen was probably the major force pushing for the sale ... Rosen, as I believe you, me, others and WS have said is an astute investor ... therefore, look at the sale as an investment rather than a lost opportunity. Just a different kind of opportunity than you envisioned for CPQ and us shareholders. It's getting more obvious that WS and reporting restrictions has NOT allowed this investment to be anything more than a line item asset rather than a true shareholder/earnings benefit. Yet, there are numerous powerful ways for this investment to payoff BIGtime for us shareholders .... it just hasn't happened as yet. My belief is that is WILL happen !! When ? ... hopefully in 2000. To this potentially positive end, I still keep the faith. victor, nonetheless your points are well taken, well thought out and appreciated Michael

To: rupert1 who wrote (77560)	2/6/2000 3:41:00 PM
From: Salah Mohamed	Read Replies (2) \| Respond to of 97611

Victor .... About Balance Sheet >>>You must be reading the wrong balance sheet.<<< For sure, one of us is not reading it correctly. I have to admit that I'm not an accountant and I don't understand the financials that well. However, common sense tells me that their financial situation was deteriorating because of the following: 1. S&P lowered their rating in late July or early August 99. 2. They borrowed $1.312B during Q3-99 according to their financial statement for the quarter. www2.compaq.com If you find these two items as a sign of financial strength, please explain. The first sign of financial strength was telegraphed to WS by Ben Rosen when he increased the dividend by 25% on 11/16/99. www1.compaq.com!ob~23350_1_1,00.html The second sign was during Q4-99 CC when they said that they reduced their short term debt by $400M (or $600M, sorry; don't remember). Regardless of what you think about AV, it is crystal clear to me that they did the right thing. The argument that having a portal makes them an internet company is totally false. The fact remains that CSCO, SUNW, EMC, and to some extent IBM, are perceived as internet companies while they are basically hardware companies (and BTW none of them has a portal) similar to CPQ. The main reason for such perception is that their financial performance and operating margins are much more superior than that of CPQ at the present time. Should CPQ be able to get their financial performance to the industry norm (10% to 12% OpM, and 10% to 15% revenue growth), the perception will change. It doesn't have anything to do with a portal, as your argument goes. In fact, CPQ has more internet properties than any of these companies. CPQ has: 1. ~$8B in internet investments 2. Several properties in the development stage: - Speechbot - Millicent - B2E portal In summary, CPQ is well positioned to strive in the internet age without AV.

To: rupert1 who wrote (77560)	2/7/2000 11:12:00 AM
From: rudedog	Respond to of 97611

Victor - CPQ got about $2.3B in CMGI stock and some cash in the deal - at the then-current value of CMGI. Even if CMGI had not gone up, I think that is good value for AV - by your own reckoning, what AV might have brought in a "Hot IPO market". In addition, I doubt that a CPQ IPO of AV would have had either the rise or the stability of the increase in value of the CMGI shares - that presumes that AV would have had a value of more than $6B... perhaps, but we'll never know. In a value basis I don't see much to complain about. I am increasingly interested in your other point - I think that it highlights some lack of bench strength in the CPQ management team. If that is true we should see more "housekeeping" in the near term, especially among the upper-middle managers who might have been expected to execute an AV spin-off...