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

To: KELLIS who wrote (22406)	3/18/1998 11:58:00 AM
From: emil	Read Replies (1) \| Respond to of 97611

I heard the same story. apparently traders like the idea of the deal falling thru, according to CNBC

To: KELLIS who wrote (22406)	3/18/1998 12:04:00 PM
From: FRANCIS C. DECORTE	Respond to of 97611

I heard it too! He said their maybe some trouble in the DEC deal. That is all he said with regards to DEC, I wished he would have said more. I personally hope it falls apart, just like the CA deal.

To: KELLIS who wrote (22406)	3/18/1998 12:11:00 PM
From: van wang	Respond to of 97611

whoa...several scenarios: 1) DEC/CPQ deal falls through (cud be SEC or cud be DEC thinks they got screwed or DEC is showing something nasty that CPQ wants to renegotiate)...I think bad for CPQ long term....but who knows...my guess...CPQ goes down even more because of the cost and waste of time (prob. why they ran an inventory because mgmt wasnt paying enough attention) and now will not be a full service shop..believe it or not...of course DEC goes down 2) DEC and CPQ renegotiate...CPQ goes down again if DEC wants more...CPQ goes up if CPQ wants to give less after they found something nasty 3) DEC and CPQ goes through...CPQ goes down...takes longer than people think...this is not Tandem...and little bit more complex due to diversity and Tandem purchase awhile back...of course CPQ integration can go smoothly...but I think this is already assumed so no change just my thoughts...and my opinions good luck

To: KELLIS who wrote (22406)	3/18/1998 12:18:00 PM
From: SecularBull	Respond to of 97611

It's called CPQ's stock (lack of) performance...

To: KELLIS who wrote (22406)	3/18/1998 1:19:00 PM
From: Andreas	Read Replies (6) \| Respond to of 97611

Here's what I think is happening, assuming for the moment that there is some truth to the rumour that the dec deal is in trouble. IMO, it's not a doj issue. Consider this; cpq has been trying to get dec for quite some time (2+ yrs.) and now in January they announce a deal which is worth approximately $60/shr to dec shareholders. In fact, to get the deal done it was important for cpq to do whatever was necessary including stuffing the channel to make the 4th quarter look as rosy as possible. Now, about two months later, the value to dec shareholders has dropped to about $53.00/shr (an 11.6% drop in dec shareholder value in less than 8 weeks)! DEC is pissed; DEC shareholders are pissed and DEC management can now point the finger at EP and say - "Wait a minute!! We've been conned. You inflated cpq stock to make the deal look attractive to us by playing a numbers game with the 4th quarter. You better get your ass back to the table and throw more money our way or we will recommend to our shareholders and board of directors not to approve this deal (they may already have gotten director approval)." EP, says "screw you - a deal is a deal. It's not our fault that cpq stock has gone in the toilette". The exchange of insults continues and DEC people storm out of cpq's board room. Privately, EP is in the board room surrounded by his lieutenants and lawyers and says; "Shit - now what do we do? We have got to consummate this dec deal. It's our only salvation in this crappy low margin, commodity business. Without dec, my $50,000,000 sales target will never be met." Lawyers say; "If you want it that bad EP you better throw mo' money on the table" At that point EP sulks out of the room and is heard whispering under his breath; "Mein Gott!! Was ist los?"