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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Jacky AY who wrote (262)	3/22/1998 10:49:00 PM
From: Ally	Respond to of 2578

>> Given that DELL earns $300 mil/qtr, they still need another $325/qtr to enable share repurchase at your indicated rate. Does that imply DELL want to go to bank debt to buy back shares?<< Dell has 707 million shares outstanding after the recent split. In the past, Dell was able to show tremendous growth in eps by buying back significant amount of its shares.... however, like you've pointed out, with 707 million shares, it's is getting to more difficult. This is precisely the problem when a company buys back shares to drive up eps. Up to a certain point, it just gets too unaffordable. Probably the point has been reached, and it is going to be a real challenge to meet First Call consensus of 42 cents for the first quarter. >> Your analysis is too rational. And being rational on Wall St. these days is one sure way to get killed. What I mean is just when everyone expects DELL will be range-bound this year, DELL may break either way << IMO you can get away by being irrational for a while, however, eventually logic and reality catches up and the stock price will thump down quickly. >>The upcoming year will be one of the toughest year to be seen. There're tons of obstacles<< Exactly. But why do devotees continue to believe that that a pe of 50 is still justifiable? d