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

To: John Koligman who wrote (21154)	3/9/1998 10:14:00 PM
From: Andreas	Read Replies (2) \| Respond to of 97611

For those of you that haven't seen today's article in the wall street journal here are some quotes and highlights: "Compaq's difficulties are it's worst since the third quarter of 1991 when it had a loss for the first time, also due to rivals' lower pricing." "This time cpq is imperiled by its own mistakes, its reliance on servers as the top source of profits and its continujing struggle to change fundamental production and distribution methnods." "Compaq has clearly fallen behind rivals ibm and Hewlett-Packard in the race to get closer to the efficiency of Dell" "IBM has made the most progress and operating from a lower cost base, is the source of the new pricing competitiveness" "Compaq already is offering discounts sooner than usual, but will initiate even deeper price cuts to move products that are in the hands of dealers" "In addition, executives are considering slowing production of commercial products in the second quarter and dgiving more manufacturing control to distributors, such as possibly allowing them to install the microprocessor that is the heart of the computer." "BUT, even beyond the second quarter the company may find the going tough if its best business, selling servers, sees the kind of commodity-style price-cutting that has plagued consumer computers and business-desktop P.C.s" If this article rings true then there is plenty of risk in cpq in the future. Somebody is going to get killed - there isn't room for everybody. Will it be ibm, hwp, dell or cpq? Right now, Dell is winning. In fact, cpq ranks fourth (dead last). All three have pretty much killed cpq in the first quarter. Remember cpq selling accounts receivable at a discount?? Remember the wise guys on this thread that said that made perfectly good sense? Baloney!! Wall Street Journal article says the following: "CPQ acknowledged last month that it sold at a discount $732 million in receivables in the 4th quarter. That helped it achieve a greater return on investment than it otherwise would have and also helped disguise the inventory building up on dealer's shelves." Oh well, we've got a long way to go. I'm beginning to change my long-term outlook on cpq. It may not be what we thought. Should I hang around to wait and see? Maybe. BUT THEN MAYBE I'LL BE WAITING FOR THREE YEARS AGAIN (DEJA VU 1991 - 1994)