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

To: Andreas who wrote (18824)	3/2/1998 6:50:00 PM
From: David E. Taylor	Respond to of 97611

Right on the heels of the report from the ML conference from CPQ about pricing competition came the news wire at 13:11 EST that CPQ was reducing prices on its entire Armada notebook line by 8% (highend $5000+) to 25% (lo end <$2500). CPQ started down almost immediately from its intraday hi of 33.5 to close at 31, DELL got caught in the down draft, and other tech stocks too. Obviously the market is hypersensitive to such news. There are three possible reasons for CPQ's price reductions: (1) pricing pressures as reported, (2) CPQ clearing out the existing Armada product line inventory to make way for the new notebook line scheduled for intro in April, (3) CPQ finally passing on lower component prices now that it's out from under the fixed price component supply contracts that have been discussed previously on this thread. Any thoughts or additional info out there? Whatever the reason(s), we may see more downward pressure on CPQ, DELL and other tech stocks tomorrow. David T.

To: Andreas who wrote (18824)	3/2/1998 7:55:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 97611

Andreas - Agree with most of what you said. Dell has produced the numbers and the growth for quarter after quarter though. I agree that I don't think Dell deserves the same valuation as CPQ, but the market has spoken. I agree that demand for both companies is strong, but Dell has not made any comments about 'pricing pressures', which leads me to believe these pressures exist at the low end. You have to hand it to Dell, they have stayed out of the low end and have made money hand over fist with their model. Some on the Dell thread believe the battle is already over, and that the CPQ model will suffer a painful death. I don't think that is the case, as the time when everyone will buy a computer online or via the mail is a long way off. In the meantime, Dell has a great niche and is milking it for all it's worth. I also believe this is one reason why CPQ is moving further into the enterprise. I just hope March is a good month per Mason's comments that the quarter is 'backend loaded'. Otherwise, I could see this 'premier company' selling for 25 bucks... John

To: Andreas who wrote (18824)	3/2/1998 7:59:00 PM
From: Maxer	Read Replies (1) \| Respond to of 97611

Andreas: Thanks for your comments on Ekhardt vs. Dell personalities. I agree that hype and bs is what drives a lot of what is going on with the CPQ vs. DELL stock prices. Dell is a great salesman. But watch what's going to happen in the next 6 weeks. As earnings start to leak, Compaq will jump. I would think we'll see $40. Dell will do well also. I just wonder what will happen if their higher cost of production catches up with them. Sure wish I had bought Dell back a little while ago- when it was around $80. But there will be a pullback. Just wait.