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

To: Windseye who wrote (21963)	3/15/1998 11:41:00 PM
From: Jack T. Pearson	Respond to of 97611

All of this blended channel stuff sounds like hype. Count the days between the time Compaq buys components and the product is delivered to their customer. Count the number of levels in the channel. When they reduce these numbers they are making progress; otherwise, it's hype.

To: Windseye who wrote (21963)	3/15/1998 11:42:00 PM
From: dave g	Read Replies (2) \| Respond to of 97611

Compaq April 25 puts: I haven't been following Compaq for very long, but I just sold some March 25 puts for 7/16. I described my option methodology on the SEG thread (message #4775 - sorry I don't know how to put a link in) using Compaq April 25 puts as an example. I would be interested in any feedback, especially from those bearish on the stock. Thanks, Dave.

To: Windseye who wrote (21963)	3/16/1998 6:28:00 PM
From: Richard Ruscio	Read Replies (1) \| Respond to of 97611

Doug, Frankly, I don't see it. What does Compaq get ? Lower inventory risk, making their channel assembly partner act like Dell, and whatever "lower cost" means by moving the assembly out of Compaq ? Let's assume that the inventory risk returns some working capital - cool, always take cash - but it's a one time "good" hit, and a longer term risk reduction (like, avoiding the one Compaq - we - are working through now. Moving costs into your channel usually results in you paying for it. How do I really believe that Merisel (or Entex, or ...) can assemble components for less than Compaq ? At best, a wash ? How long will it last ? Memory, power supplies, storage ... what does Compaq get - real volume price discounts ? When does the channel buy the parts, and rent the brand ? What's in it for the channel assemblers ? More work, more cost, the ability to "respond quicker" ? Quicker than Dell ? Lower cost than Compaq ? I'd look at it, in the channel model, depending on who pays for what when. If Compaq pays, it's traditional assembly work / 2 tier manufacturing. If the channel pays, it's a poor imitation of Dell. I'd love to know why the economics work, though. rr