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

To: Andreas who wrote (22307)	3/17/1998 7:31:00 PM
From: Nicholas	Read Replies (1) \| Respond to of 97611

Andreas, Not trying to beat a dead horse, but according to a broker friend <ggg>, says his fund managers won't touch Compaq with a 10 ft pole. He also says they're bearish on tech. So the 64,000k $$$ question is, do I sell my Compaq at a loss and buy it back at $15 or go watch the grass grow for a year and gut it out. Nicholas :(

To: Andreas who wrote (22307)	3/17/1998 8:11:00 PM
From: Chris McConnel	Respond to of 97611

Andreas, well then, I guess I would have to disagree with you :). CPQ is a very different company then it was in 1991. CPQ had it's head up ass then. Their PC prices were way out of line with the rest of the industry. Rod Canion had created the wrong kind of culture for a PC company. He thought he was running IBM and they ran him off. You might be right, CPQ could be dead money for the next 3 years, but I just don't believe this is the case. But growth in share price will depend IMO on how quickly they can absorb and reorient Digital. Selling client PC's is going to be an increasingly low margin business with each passing quarter. Companies are just not going to need much more then 200mhz to run general biz apps. Also Microsoft's Hydra will further commoditize client hardware. The only way the CPQ is going to prosper over the long term, is leave behind their PC roots and become a full service organization. This includes networking, larger servers and services of all kinds. CPQ has done well in the high margin workstation market, but they are going to need to challenge SUN and IBM on all fronts to really grow. By 1999, I think they will be able to show tangible long term synergy from the merger. The recent Upside article would disagree with me on this, but I think the article is looking at from the idea of DEC absorbing CPQ and not the other way around. Am I being wildly optimistic about this? Ya, maybe. But I think that CPQ has great management. They are efficient, agressive and they produce. And I think they will be able to convince money managers that things will work out. - Chris Check out the Kat's column in PCWeek: www8.zdnet.com In Houston last week, you could hear the sounds of Digital executives making the big pitch to save their divisions, post-merger. The techies with enterprise and Windows NT expertise are feeling pretty good right now, one insider reports. Higher on the food chain, the rumors are heating up about Digital CEO Bob Palmer. One insider believes Palmer will be gone before the deal is finalized; another estimates that he could walk away with $40 million after all the stock is factored in. With Palmer's days numbered, tipsters say there's intense jockeying between John Rose and Bruce Claflin for the role of heir apparent. The Compaq board loves both Rose, the ex-Digital exec who's now a Compaq senior VP, and Claflin, a senior VP at Digital. The problem is, How does the board anoint one without alienating the other?