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

To: Satyr who wrote (18659)	3/1/1998 4:29:00 PM
From: ed	Read Replies (1) \| Respond to of 97611

My point is I do not like the analysts release any thing which did not have a solid source to back it up. As to the stock goes up or down , it is the decision of investors. I do not think the author will be stupid enough to come to the conclusion that there is a short of supply just based on one or two retailers response.

To: Satyr who wrote (18659)	3/1/1998 4:45:00 PM
From: ed	Read Replies (2) \| Respond to of 97611

From your response I can see you either do not have much experience in investment or just did not learn at all. If you do a survey, you will see that a lot of stocks with healthy fundamentals , the stock price may not response in short term. Just look at the SUNW, last march, the stock price fluctuated up and down between $32 and $26 for three months after split. Everyone said the company had some unknown problems , and then three months later the stock started to move and hit as high as some where around $56 . So, what is the problem with SUNW last March ? Is the fundamental of SUNW at March of 97 different from that when it hit $56 ? I do not think so. The only problem is that the stock price of SUNW got manipulated on March of 1997 when the big players trying to accumulate the stock at lower price. That is what happening to CPQ now. So, I am worry for you and your family , FINANCIALLY !!!

To: Satyr who wrote (18659)	3/1/1998 4:59:00 PM
From: Obewon	Read Replies (4) \| Respond to of 97611

Can we please stop whining about the motivation of the recent downgrade?! The motivation was the same as the rest of us here have - PROFIT and GREED. Enough said. Channel stuffing issue: The rumors of CPQ stuffing the channel with unwanted goods (which started CPQ's recent slump even before the short-term uncertainty of the DEC acquisition was injected) originated from just one source! MicroAge announced in late December (I think) that CPQ was pressuring them to take more inventory than they felt they needed. A quick look at MicroAge's fourth quarter financials gives an apparent reason for why MicroAge came public with this news. They are losing money - lots of it! To solve this problem, MicroAge's management must increase profitability quickly. The easiest way to do this for a distributor is to increase its sales turnover (ie reduce its inventory). Holding inventory is costly (ie that's why everyone loves Dell's direct selling model). It is even more costly this quarter since CPQ has reduced the amount of price protection it is offering its channel partners. My supposition is that MicroAge needed to reduce its inventory costs so it decided to accept less product so if first quarter sales took its NORMAL plunge, the company could still be protected. Remember, the amount of days of inventory in the channel is extremely sensitive to the assumptions you make on FUTURE unit sales. MicroAge which might have predicted only 50% unit sales growth over Jan 97 levels would calculate inventory levels at 5 weeks while CPQ which predicted unit growth at 75% calculated the SAME AMOUNT OF INVENTORY at 3.5 weeks. Considering that even CPQ officials recently expressed amazement at the 90% unit growth in Jan over the prior year, I am certain that there is NO CHANNEL STUFFING problem and that CPQ is probably well ahead of its pledge to reduce inventory to three weeks by 3Q98. (I, however, will repeat my caveat from earlier posts that I don't know if the pledge will be achieved once DEC's inventories are added in since I haven't done the research needed on what DEC's inventory levels are.) OB