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

To: rudedog who wrote (89171)	1/24/2001 10:33:34 AM
From: The Duke of URL©	Respond to of 97611

Your right, the merger date was 6/29/99, I thought it was a year earlier. The lock up was one and a half years. The stock had already tanked. Please extend my most sincere apologies to Mr. Wells, Ben and what's his name, the CFO. techdeals.work.findlaw.com

To: rudedog who wrote (89171)	1/24/2001 10:46:33 AM
From: tonyt	Respond to of 97611

>Duke - I don't think CPQ was able to unload - I think there was a 2 year window > or something like that. Maybe someone should tell ZDNet: THE DAY AHEAD: Compaq's CMGI loss quite a distraction By Larry DignanTDAIN ZDII COMMENTARY -- Compaq Computer (NYSE: CPQ) had plenty of positives in its fourth quarter earnings report. The company stuck by its 2001 outlook, topped estimates and said it wouldn't be dragged into a PC price war. But a write-off related to its investment in CMGI was quite a distraction. Compaq reported fourth quarter earnings of $515 million, or 30 cents a share, on sales of $11.5 billion. The earnings were two pennies above consensus estimates and excluded charges. Here's how the "excluding charges" game works. Analysts and investors usually exclude one-time items such as gains and losses. The focus is on operating results. However, the real bottom line includes the extra curricular stuff. Including a $1.8 billion charge for the write-off of investments, principally the massive decline of its investment in Internet incubator CMGI, Compaq reported a net loss of $672 million, or 39 cents a share. Ouch. As Compaq CEO Michael Cappellas rattled on about the company's enterprise business, I just kept thinking back to those ugly CMGI shares. Did Compaq get emotionally attached to CMGI like one of my broker pals? Why didn't Compaq just sell shares a little bit at a time? With a writeoff approaching $2 billion, it's pretty clear that Compaq should have reduced its 13 percent stake in CMGI a little earlier. Compaq, like many individual investors out there, has taken a bath on CMGI. In its supplemental financial data, Compaq said the charge was related to "certain equity investments judged to have experienced an other than temporary decline in value." That's putting it mildly. Translation: Compaq has given up on a CMGI recovery. You can't blame Compaq for giving up. CMGI can't even come up with reliable financial targets. CMGI's AltaVista, a former Compaq division, will never go public. What the Compaq big bath charge really shows is the folly of those stock deals in 1999 -- especially if you held on to the shares. In August 1999,Compaq sold an 81.5 percent equity interest in AltaVista for approximately 19 million CMGI common shares, CMGI preferred shares convertible into 1.8 million CMGI common shares and a $220 million three-year note receivable. When the dealing was done Compaq owned a 16 percent stake in CMGI. At the time of the Compaq-CMGI deal, CMGI was "a clear leader in the Internet economy." Benjamin M. Rosen, who was Compaq's acting CEO when the CMGI deal was announced, sounded proud to be a CMGI shareholder. "As CMGI's largest outside shareholder and its principal strategic partner, we look forward to mutually driving future Internet opportunities," he said. If he only knew. Luckily, Compaq cashed in on the CMGI deal with a gain of $1.2 billion way back in its third quarter of 1999. But Compaq kept taking CMGI shares. CMGI had a terrible habit of using stock to pay the bills. In August, CMGI paid its semi-annual interest payment to Compaq on those AltaVista notes with 312,547 CMGI shares, according to regulatory filings.