To: JEFF GREGERSON who wrote (22639 ) 3/20/1998 12:55:00 PM From: Dulane U. Ponder Read Replies (1) | Respond to
Jeff, apologize if I repeat info stated in any later posts but I'm just checking into the thread. USRX had a very advantageous takeover deal with COMS; many (past posts on the COMS thread) say that Coms got the short end of the stick and that USRX was not forthcoming about its already mounting inventory problems before the merger. As Cpq has been evaluating DEC for aat least 2 years, don't think DEC holds any unpleasant surprises for CPQ. Further CPQ's takeover of DEC is based on, among other things, the market price of DEC stock at the closing of the deal thus avoiding the disadvantage of paying a set price for DEC should its stock price delcline (which it has since announcement). After the merger of USRX and COMS, the stock price did briefly recover but as the inventory problem became apparent to the market, the stock price fell and has yet to recover. The x2 sales were also depressed because of consumers who were concerned because 56k standards had not yet been established. Here there is no parallel between CPQ and COMS although arguably the issue of commoditization has been raised in reference to modems and computers. In the late summer, huge insider selling took place at COMS which additionally impacted stock price when it was discovered. At this point, COMS was still promising great earnings when it obviously knew USRX had been stuffing the channel. I believe CPQ disclosures have been much more forthright than any COMS has made about its businesses. I know these points are not well stated, perhaps, and am sure many could be better expressed by those with more expertise. In fact, I'm sure many of these points could be refuted, as well. I hope, though, they have given you a jumping off place. dp
