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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (167240)	9/27/2001 12:59:00 PM
From: John Koligman	Respond to of 176387

Thanks, GV... Regards, John

To: GVTucker who wrote (167240)	9/27/2001 8:02:30 PM
From: mepci	Read Replies (1) \| Respond to of 176387

They are not screwed, if they continue to do the same practice. They could have recovered by keep on selling the puts during the last few ups and down.

To: GVTucker who wrote (167240)	10/9/2001 9:03:43 PM
From: John Koligman	Respond to of 176387

GV - Here is a nice overview of where Dell's cash has been going and to what extent. Jeez, not only do they have to sell TWO PC's to equal what one used to bring revenuewise just a short time ago, BUT now they have to use the revenue from that second one to buy their stock at inflated prices <ggg>.. Courtesy of Gus 'Mr. Storage' off the EMC thread... Regards, John To:John Carragher who wrote (13286) From: Gus Tuesday, Oct 9, 2001 11:17 AM View Replies (1) \| Respond to of 13293 Re: Dell's profitability Profitable? Yes. Proportional impact on cash flow? No. During that last 6 quarters, Dell booked a total of $2.6 billion in net income and generated $6.0B of net cash flow from operating activities. However, Dell spent 70% of its operating cash flow during that period to acquire shares at prices much higher than its market price to unwind part of its put obligations! During the last 6 quarters, Dell acquired 98 million shares at a total cost of $4.2 billion to unwind its put obligations at a steady rate of 16-17 million shares a quarter. These purchases had an average price of $42.76, which is well above the trading range of Dell stock for most of the last 6 quarters. As of 2Q2002, Dell still had put obligations equivalent to 81 million shares at an average price of $44. Dell needs to get its stock up above that level so that most of those puts will expire worthless otherwise it may have to spend another 70% of operating cash flow to retire those puts over the next 5 quarters or so. My guess is that Dell is going to stretch out those puts until FY2004 once they see the PC/server upgrade cycle turn stronger. Still, the opportunity costs are very substantial.