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

To: Joe Antol who wrote (18309)	2/28/1998 12:23:00 AM
From: Obewon	Read Replies (1) \| Respond to of 97611

Joe, if CPQ had good momentum going at the time (ala Dell or Microsoft), I would probably agree with you that company executives would vigorously defend itself (once the gag period is over). However: 1) momentum has been broken for the past two - three months, so saying little will not whack the stock down as it would if momentum had been present. 2) the long term interests of the company are better served by letting the stock languish for a while (and company executives have ALWAYS concentrated on the long term vice the next two quarters). 3) by the time the acquisition is completed, CPQ will be out of the period in which it couldn't announce a stock buyback due to the accounting method used in the Tandem merger. Expect a dual announcement touting the DEC acquisition's completion as well as a $2B - $3B stock buyback (approx 4% buyback). The company can get a bigger slice with a lower stock price as well as building instant momentum in mid-year when Asia should start recovering from the effects of 4Q97 currency devaluations. OB