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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: DWW II who wrote (5075)	12/18/1997 7:54:00 AM
From: BJP1946	Read Replies (1) \| Respond to of 8002

Dan, my screen showed a news item hitting the tape at 2:48 new york time headlined "Gateway 2000 Chairman files Form 144, to sell shares". The text: "Theodore W. Waitt, chairman, president and CEO of Gateway 2000, Inc. of North Sioux City, S.D., reported on December 11, 1997, the proposed sale of 375,000 shares on Dec. 8, 1997, for $12,000,000 through CIBC Oppenheimer Corp." I don't know if this was the first broadly disseminated notice of the sale -- obviously, persons on this board had the news earlier. And I don't know for sure that it caused the late day decline, tech stocks in general were in full retreat at the time. I recently talked with Jim Chanos, perhaps the most respected of the short sellers because he bases his positions on exhaustive analysis on not on spreading rumors. He saved my year for me by giving me Boston Chicken as a short. I thought that GTW would be running into financial problems when I saw that they had run through almost half their cash. He said that he thought they had more of a business than a financial problem because everyone was coming after them and it was a commodity business. I didn't have time to get any details but think about it. Soundview recently cut estimates for CPQ fairly dramatically. Although many on this board say that you can't compare GTW to Packard Bell in terms of product (I'm not sure this is true; I bought the first sub-zero, which was a PB, for my daughter and I've not once had to call for service), is anyone really going to claim that CPQ doesn't make a decent product? And they've got several sub-zero models. I've also got a Micron and it, too, works fine. We all know about Micron's results and what's happened to its stock. How is GTW going to escape? Really not clear to me. How are they going to keep ASP's over $2k when the market's headed under $1K? Out of loyalty? Although you've got to admire management's attempt to find new areas and/or differentiation with their local stores, ISP service, servers, etc., you can also look at it as a deterioration in their fundamental business model and acts of desperation. But more importantly than all of the above, I don't like the way the whole thing smells. I thought the press release with last quarter's earnings was distorted -- unless I'm missing something they lost money on an operating basis except for a tax credit -- and they had a huge inventory writeoff in a business whose very success was predicated on not carrying inventory (what's that all about). Waitt's building a huge house in La Jolla financed by selling stock into a market rising on unattributed rumors that the quarter's going great. Please. Does anyone have a record of Waitt's previous 144 sales so we can try to ascertain if the recent one is novel in any way?