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To: jim kelley who wrote (31946)	3/3/1998 10:49:00 PM
From: KEVIN SAMPHERE	Read Replies (5) \| Respond to of 176387

TO ALL: I was told by my broker that I won't be able to get in on the split if I buy some more shares tommorow, because it takes 3 days for the trade to settle, IS THIS TRUE ? THANKS IN ADVANCE. KEVIN

To: jim kelley who wrote (31946)	3/4/1998 12:02:00 AM
From: Chuzzlewit	Respond to of 176387

Jim, I think it is. BTW, I'm scheduled to give a talk on reading and interpreting financial statements to an investment club. I'm planning on using a comparison of CPQ, DELL, HWP and IBM to illustrate the finer points of analysis -- particularly inventories and manufacturing efficiencies. Should be very interesting. Regards, Paul

To: jim kelley who wrote (31946)	3/4/1998 11:17:00 AM
From: Gabriel008	Read Replies (1) \| Respond to of 176387

Jim, here's an article that discusses the CPQ stuffing issue. It makes me glad I dumped Compaq shares last week. Herb on TheStreet: Why Shorts Think Compaq Has Stuffed the Channel; Chatter About Financial Sani-Flush By Herb Greenberg 3/4/98 9:21 AM ET More Compaq (CPQ:NYSE) capers: Was CFO Earl Mason prepping Wall Street for the possibility of bad news with his unusually downbeat comments at a Merrill Lynch conference Monday? If so, it wouldn't surprise the swarm of short-sellers buzzing around the company. As this column mentioned yesterday, they were attracted months ago by the sweet smell of an overstuffed distribution channel. How did they pick up on the scent? They simply followed Compaq's biggest distributors. "You look at what their inventory levels are at the end of each quarter, and you listen to their conference calls," says Jeff Matthews of Ram Partners in Greenwich, Conn. "They will tell you who's been doing what to whom." Matthews says Compaq's name started coming up repeatedly last summer as a stuffer of major proportions. That was surprising, considering it had just moved to a Dell-esque build-to-order model. Build-to-order is supposed to eliminate stuffing, which occurs when manufacturers offer special incentives to distributors so they take as much merchandise as possible. Special deals are a way of life in the distribution biz, but there's a fine line between normal and excessive. The upside to crossing that line is that it can help a company beat analysts' estimates. Do it enough and it becomes a "rob Peter to pay Paul" situation that blows up if sales either don't materialize or start to slow. When that happens, it can take months -- even years -- to unload the stuffed merchandise, resulting in earnings disappointments. Compaq has insisted it doesn't stuff, but as recently as Feb. 24, the company faxed a letter to at least a handful of U.S. distributors promoting a "sales acceleration" program that offered special discounts to distributors if they took Compaq's products. The timing of the promotion apparently surprised distributors, because usually they don't get incentives from Compaq until the last week of the quarter. "You hear the same complaints now about Compaq that you used to hear about Novell (NOVL:Nasdaq)," Matthews says. Novell was a master of stuffing in the early 1990s. Its stock, which peaked in the mid-30s, now trades at 10; in the past 12 months it traded around 6. It took Novell upwards of two years to unstuff itself. Will the same thing happen to Compaq? Hard to say. The one trick it may have up its sleeve is its pending acquisition of Digital Equipment (DEC:NYSE), which has been dubbed "Sani-Flush" in some investment circles. That's because they suspect Compaq may try to bury charges related to unsold merchandise as part of the Digital deal. (Digital has problems of its own. Late yesterday Pioneer Standard (PIOS:Nasdaq), a distributor, preannounced a lousy quarter. Nearly 30% of its biz comes from -- surprise! -- Digital.) Meanwhile, if Compaq's channel is as stuffed as some critics think, whaddaya think that'll do to Intel (INTC:Nasdaq)? Compaq is one of Intel's biggest customers. If Compaq has a few months' supply of previously built PCs on hand, you could argue it wouldn't have to buy as many microprocessors. Compaq officials couldn't be reached. Final point: Yesterday's item said Mason was talking at a Merrill Lynch conference in San Francisco. Make that San Jose.