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Technology Stocks : Digital Equipment Corp. (DEC) -- Ignore unavailable to you. Want to Upgrade?

To: George Dvorsky who wrote (2692)	1/8/1998 7:26:00 PM
From: hossein hosseini	Read Replies (1) \| Respond to of 3276

Question on DEC's cash? If DEC has 2.5 Billion in cash, would the interest on that (at 6% is 150Mil) be added to the bottom line? if so, that is almost $1/share. Is that counted in the estimates? Appreciate your response, Hossein

To: George Dvorsky who wrote (2692)	1/8/1998 7:32:00 PM
From: Mike V.	Read Replies (2) \| Respond to of 3276

George, I do appreciate your comments. I did not do a bottom up analysis of DEC's balance sheet and your comments have been helpful. The downside to DEC at this time does look limited as my plan was to trade in and out of DEC by the end of Jan. However, you may want to do some research on DEC's networking business and the sale to Cabletron. The rumor in Greater Boston is that the sale to Cabletron was a fire sale. Nobody else wanted the business..DEC had been shopping the networking group for over a year....the story I heard was $100 million in cash and the balance in future product discounts.....I REPEAT THIS IS NOT A KNOWN FACT BUT ONLY THE PASSING ON OF A RUMOR. As for the guarantee that Alpha will be around...the only guarantee is that Intel will manufacture Alpha, for 7 years...nothing that I can find about Intel actively selling the chip....DEC still has to create the demand....and as of today the FTC statement has clouded the Intel relationship. IMO nothing will stand in the way of Intel and the success of Merced as the 64 bit computing standard. If I was a DEC customer I would be very uneasy about the recent announcement of Sequent and DEC porting DEC UNIX to IA-64 (Merced). Once the port is completed their is no compelling reason to select DEC UNIX on Alpha over DEC UNIX on IA-64 (Merced). If this occurs then margin squeeze continues. DEC continues to look more and more like a services/system integrator, EDS comes to mind. Maybe you can do a 1999 forecast of DEC's PE with minimal Alpha sales, due to Merced, a services business with 31% gross margins (this is the gross margin on DEC's service business in their last quarter), no DEC developed high margin hardware and/or software (it's all been sold)..... To me it still looks like Unisys !!! Mike V. PS. I really do appreciate your comments!