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

To: Satyr who wrote (21914)	3/15/1998 2:23:00 PM
From: ed	Read Replies (1) \| Respond to of 97611

CPQ will be much better off by mergering with DEC. The immediate benefit is DEC's worldwide customer base, the second immediate benefit is the ALPHA CPU which is at least 2 years early than Merced. For the first time CPQ can build up its own high end computers , servers with its own CPUs, wih MSFT's support. CPQ will expand its business into the enterprise computing world which has higher profit margin, both in hardwares and after service. While in the same time, DELL will continue being limitted in the PC business. You can use direct sale model to sell PCs, but not much complex systems for enterprise computing . So, the day the merger finalized is the day CPQ formally get into the high end enterprise business. DEC is a company currently making reasonable profit, and after restructuring , the profit margin will even be much higher with more efficient operation. I always ask people what CPQ will be in five year without merging with DEC today, however , noone answer this question so far. If CPQ will be in a potential crisis five years down the road without merging with DEC today, then today's decision is a smart one. This will pave a way for long term sustaining growth. Without those, I am kind of worry for DELL's investors.

To: Satyr who wrote (21914)	3/15/1998 3:00:00 PM
From: JEFF GREGERSON	Read Replies (1) \| Respond to of 97611

I'd like to speculate on Compaq's future by looking at a the present. In today's Boston Sunday Globe inserts from four computer sellers(Compusa, staples, computer city, and officemax) feature a compaq on the front cover. This is a strong indication of Compaq's stronghold in the dreaded channel. It doesn't surprise me that they are loathe to give this up, I imagine it has been and continues to be very profitable for them. They can't go BTO without seriously upsetting this cash cow. Going forward I have faith that Compaq will indeed increase their profitability albeit more slowly than the others because they have so much at stake. A more competitive pricing environment means short term pain for Comapq but inflicts more of a toll on the second tier box makers. I think we're in the midst of a very painful shakeout, the survivors will gain market share at the expense of margin. The survivors will be the low cost providers, Compaq's size and buying power guarantees this. The key is to get pc ownership near or at 50% penetration in the United States, and grow their market share in Europe, Asia and the developing world where markets aren't so mature. My concern remains that Compaq's image is not as technologically advanced as Dell, savvy users like the idea of Dell configuring a box to their specifications, Compaq needs to address this issue or will continue to surrender customers and the richer margins on high powered machines to Dell and Gateway. Just my opinion. J. Gregerson

To: Satyr who wrote (21914)	3/15/1998 3:05:00 PM
From: Greg Jung	Read Replies (3) \| Respond to of 97611

Dell .vs. CPQ Challenge: Suppose tomorrow you had to take a "market-neutral" combination of CPQ and DELL. i.e. go long one and equally ($-wise) short the other. Which way would you go? I'd go long the cpq. Put me down for (100) shares Dell (at 130) balanced by +520 shares cpq (at 25). Greg

To: Satyr who wrote (21914)	3/15/1998 10:33:00 PM
From: Jason W. France	Read Replies (1) \| Respond to of 97611

Satyr, let me answer your question "Do you believe that Compaq will be higher 2 years from now or do you think their strategy will fail" actually two questions here, first one about strategy: I think the CPQ strategy of vertical integration will fail, it didn;t work for unisys, didn't work for Tandem, didn;t work for DEC, , not working for HP or IBM. customers have clearly voted with their checkbooks that this model holds no value for them. maybe CPQ knows something these guys (and CPQ customers) don't second one about CPQ stock price in two years I have made no specific comments (yet!! ha ha) about effect of all these issues on CPQ stock. (we still have several other issues to delve into, which will end up in a detailed discussion on stock price) I am not there yet in my thinking. Safe to say my intution is when I do firm up my thinking in this area I will still be bearish on CPQ stock A sincere thanks to you for your continued value-add comments Jason