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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (47485)	2/9/1998 11:01:00 AM
From: Sonny McWilliams	Read Replies (1) \| Respond to of 186894

Mohan, thanks for the link to the 10 reasons why CPQ may surprise on the upside. I had heard of 5 out of the 10 on CNBC. Intel was up this morning but is now down along with most of the techs. I guess the street was not too keen on Cisco's report. You would think that this article would have propelled Intel higher today. Well, the day is not over yet. biz.yahoo.com Sonny

To: Mohan Marette who wrote (47485)	2/9/1998 2:38:00 PM
From: Reginald Middleton	Read Replies (2) \| Respond to of 186894

I too belive CPQ is a more valuable company after its acquisition of DEC, but the following is self contradictory: <In fact, we estimate that the net price tag closer to $25-$30 per share or about 10x our EPS estimate for DEC's -- and this is before taking any synergies into account. As shown above, we estimate that DEC's balance sheet can generate around $4 billion in cash. Here's how we get to that figure: we add DEC's cash on hand of $2.0 billion to the cash that Compaq can pull out of the DEC balance sheet by bringing its ratios on receivables and inventory to parity with Compaq's ratios today which generates an incremental $2.1 billion.> The author is implying synergies after saying that he/she would not be taking synergies into consideration. The author is assuming the combined management can do something that DEC's management could/would not do on its own, for the (enterprise servicing and UNIX) business they are acquiring is rather new to CPQ. The irrational assumption of synergies is usually what brings many acquisitions crashing down (post mereger), due to the pie in the sky assumptions (aka synergies) not coming to fruition. I am not saying this will happen, I'm just pointing out an inconsistency in the story. I am probably going to take apart the merger myself, for I feel that CPQ has the potential to make a LOT of money for itself and it's investors in the future. I would also like to see Dell obtain the resources to service the enterprise, for I have a lot of confidence in their management, as I do CPQ. Back on topic for Intel, I ran the numbers posted them on my site. In order to make the raw numbers more palatable, I put some fo them in question and answer format, such as: What is the fair value of Intel using Discounted Cash Flow analysis and perpetual growth? I invite all to come by and view the analysis. All comments are welcome. rcmfinancial.com