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

To: kaka who wrote (175817)	2/6/2007 10:40:41 AM
From: GVTucker	Read Replies (1) \| Respond to of 176387

Nice article. There's one thing holding me back, though. Tech stocks that have gone through bad times tend to trade down to book value. That is when you get to the scenario quoted in the article, when "Very quickly the whole thing turns into a circus and is completely divorced from reality". It happens over and over again. Most recently, before AAPL and HPQ turned things around, both companies traded below book value. It is there that the stocks were great buys, the risk/reward was great. The book value provided a decent cushion if things didn't get better, and the valuation provided lots of upside if things got better. The problem with DELL is that book value doesn't go up at all. Book value per share right now is about $1.50. The last time that book value was this low was way back in 1999. How can a company make the money that Dell has in the 2000's and have a declining book value? Simple--DELL continually gives away a ridiculous number of stock options to management, and tried to make up for this huge dilution by buying back shares when the stock was very expensive. And in the end, shareholders transfer all those billions in profits and more over the past six years to management, including Michael Dell, who has made a practice of selling his shares in ten million share blocks on a regular basis. There just isn't that risk protection in DELL right now because management has been taking far too much from shareholders for many years.

To: kaka who wrote (175817)	2/6/2007 11:00:37 AM
From: Sr K	Read Replies (1) \| Respond to of 176387

Source? The Inquirer?

To: kaka who wrote (175817)	2/6/2007 12:34:46 PM
From: John Koligman	Read Replies (1) \| Respond to of 176387

As GV said, that article made quite a bit of sense. I've been looking for a pullback in the market, if we (finally) get one in here and Dell becomes a teenager my guess is long term folks with a penchant for risk can start building positions. Frankly, I'm getting more interested in AMD, if you look at the history of that stock, huge runs and huge pullbacks, yet today they are in a much stronger market share position than in the recent past. Some on that thread are talking single digits this year due to poor financial performance and the price war with INTC, but for risk takers that would be a great trade IMO... From my 'basic' chart reading ability it sure almost looks like one of those head and shoulders formations is just about complete. Trouble is, what happens after that <ggg>... Best regards, John PS - 'Service akin to running a cheese grater over one's genitals???' What a great line! <ggg>