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

To: John Chen who wrote (11876)	12/19/1997 9:17:00 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Ken and John....CPQ and DELL both got positive mentions by one of the guests on Wall Street Week tonite. Stephen

To: John Chen who wrote (11876)	12/20/1997 1:04:00 AM
From: Obewon	Respond to of 97611

To All who put any credence in the current Gateway rumors: Gateway is a good company for two thing: direct sales and brandname recognition. These are both marketing issues. If CPQ had difficulty in this area, I think that there could be a slight possibility for a deal. BUT - CPQ has proven to be a great marketer and has the strongest brand in the industry already. Why "dilute" it with having to support another competing brand? CPQ has its hands full still integrating Tandem as well as making major changes in its channels. It would be potentially disasterous to throw a direct marketer merger into the mix until the company's channel efforts have failed (which there is no indication of - yet at least!). CPQ is going to be looking for complementary HIGHER margined businesses to expand into (i.e. more support or consulting type). Currently, Gateway offers none of this. In fact, Gateway can't offer these services because it's workforce isn't up to snuff yet. Gateway is constrained by the workforce it can attract because of its current location. While the South Dakota location has been capitalized by the company's marketing department, alot of the people with skills Gateway will need don't especially want to live there. OB BTW: Next year companies will be required to state in their filings, in addition to current earnings, their earnings taking into account stock options. Microsoft did this in the past year and revealed that its earnings after paying for all the stock options it issued (to cancel the effect of the dilution)was in the neighborhood of $500 million instead of the $3.5 billion net earnings reported. Does anyone else see this as a potential problem at CPQ?