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

To: TimbaBear who wrote (170625)	8/16/2002 3:45:43 AM
From: Sig	Read Replies (4) \| Respond to of 176387

Thanks for a great analysis of Dell financials. In the early days the use of options and buybacks worked wonders for the company and the stock. Selling those puts in 2001 was a huge error. I dont expect the misleading reports today were intentional, but just the result of continuing the same "book-keeping" procedures as in the past or else to have the stock "crash" if they suddenly used more honest reporting. Like accounting for the options costs. The company planned for success and appeared able to grow 30% per year, until the economy sagged and even then they have done wonderfully well in maintaning growth and profits. If they could have continued to grow earnings at 20 or 30% shareholders would have little to complain about Dell has kind of 'hit the wall' because of its bigness. They could not have predicted the problems to be overcome in Germany, Europe and China where it took several years to get people to buy on-line but things are now looking better there. Investments are comparative. How many billions ( of shareholders wealth) did Compaq blow away in the purchases of Digital and Tandem? That would make the $2 bil mistake by Dell look like a minor glitch Are Dell executives really over- compensated in comparison to executives of Glw, Nt,Jdsu, Qcom Hwp, T, ot Lu? And how about the Government taking nearly half the profits ? There are several options open here: 1. They could suddenly expense the options which would cut the earnings nearly 30% and the stock would crash to $12 a share for example. Knowing they are going to do that, the company could make a fortune (beneficial to shareholders in the long run) by BUYING the puts. Is that "manipulation? I dont know. Is it not manipulation if the government required companies to expense options (they did'nt) And I guess the government would take half the profits made that way. And institutional investors who hold 1 bil shares would scream 'highway robbery' if you did not tell them beforehand so they could get into the act. And that WOULD be insider trading. 2. Because of the unknowns in making this change, I think the company should and will maintain continuity in their accounting and hope for the best. Devoting their efforts to improved economies,gaining market share, and moving into higher margin areas. That is working extremely well and if continued Dell will become a household name <G> Sig I will go read your analysis of INTC since I own a bit of that too.