Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Captain Jack who wrote (89031)	1/22/2001 10:21:15 PM
From: Piotr Koziol	Read Replies (2) \| Respond to of 97611

CJ, El, thread, here are some interesting observations from the Yahoo! thread: Re: Compaq a great company by: gorimepon 01/22/01 09:17 pm EST Msg: 212893 of 212898 Allow a few more quarters. Someting of a slow death - it is going to be very amusing to watch. Nobody has ever succeeded in making profits by buying business in a competitive business (price wars) but maybe Dell knowS the trick that nobody else ever knew. Take Lucent as an example. They tried to buy sales aggressively from 1998, but each quarter's shortfall in turn had to be met by bringing forward the next quarter's sales through massive discounts. Eventually, they could not catch up and then the warnings came. Not surprising that Lucent and Dell are now competing for who can make the most warnings! JMO, but why even buy share in a business that will be dead in a few years - much like Worldcom trying to buy share today in long distance. Mr. Dell believes the PC will be around for ever and he may be right. But the economics do not support it - why buy such an expensive piece of equipment that crashes frequently (ala Microsoft software reliability) when you can buy several devices (appliances) that are much cheaper and far more reliable because they focus only on specific tasks. Little secret that Dell has always used - the biggest advantage in the "Direct model" has always been the S&H, a charge that indirect sellers do not have the priviledge of. Say you buy a system from Dell and they charge you $100 to ship it even though they pay UPS less than $20. They make a gain of $80 compared to indirect selling. On a $1200 system, the shipping profit is 6-7% which is one third of their 20% margin. Not surprising they cannot make earnings this quarter because they gave a lot of "free shipping" in the last several months, among other things. By comparison, the savings from not holding inventory is less than $10 - mainly the capital they save by holding two weeks less inventory that competitors The most damaging of all is Dell's option exposure. While this will not hurt the bottom line, it badly hurts morale because nobody likes to see their company lose the $2 - 3 billion Dell will lose on the 100+ million puts they sold. Also, it will use up a lot of cash which will make it difficult in future to continue buybacks which support the stock at present. Interestingly, they are still selling puts - maybe to help pay for the shares they will be forced to buy back. Microsift has the same problem, but has more than five times as much cash for twice the liability, so they will feel the impact less. THE ANALYSTS MAY BE LAZY, BUT THEY ARE SMART. EXPECT DELL TO GO UP A FEW MORE DAYS TO ALLOW THE ANALYSTS' COMPANIES TO GET OUT BEFORE THEY LET THE STOCK SINK. BUT THE POOR INDIVIDUAL INVESTORS JUST WILL NEVER LEARN....

To: Captain Jack who wrote (89031)	1/23/2001 8:12:11 AM
From: hlpinout	Read Replies (2) \| Respond to of 97611

Attention Shoppers! Monday, January 22, 2001 My quest for the Holy … iPAQ H3650 Janice Chen, Editor-in-Chief, ComputerShopper Anyone in my office will tell you what an avid -- some might say rabid -- Palm OS proponent I am. For ages while others were shouting "Windows CE! Philips Nino!" (remember that one?), I was shouting "too complicated, too clunky!" I stayed pretty smug as CE tanked and Palm sales shot up. But this Pocket PC thing has me worried. Every time I walk past an office and see a Compaq iPAQ H3650 glowing in its cradle, I find myself getting a pang of gadget envy. So I decided to see how much one of those babies would set me back. I found it first at firstsource.com for $481.79, but it wasn't in stock and they had almost 50,000 units on backorder! It wasn't in stock at eCost.com either, but if I could wait a month, the price was $488.98 plus a $13.95 handling charge but free shipping (and no tax for my New York address), for a grand total of $502.93. After calling several more vendors, I discovered that Compaq is shipping out the product in such small quantities that it's backordered practically everywhere. I finally found the product available at Myinfinity.com, for $589.99 (plus tax and $10.80 shipping), but was told I was one of 50 who had placed an order and only 65 units would be coming in on Tuesday. Returning to my Palm inclinations, I looked for a Palm Vx and found a good deal on it at PCnomad.com ($396.99). While I found the product selling for less at other sites, PCnomad's free shipping and no sales tax for New York made it the best deal. The site offers a money-back guarantee for returns within seven days of receipt, and if you have functional problems with the product, Pcnomad will pay for the shipping costs. Of course, a Palm Vx is no Pocket PC (for better or worse), but for more than $200 less and a guarantee of the product being in stock, I'll put up with color-screen envy for a little longer.