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

To: James F. Hopkins who wrote (23574)	3/28/1998 7:13:00 PM
From: Satyr	Read Replies (2) \| Respond to of 97611

Jim I think the DEC shareholders would be crazy to turn this down. Remember that DEC was trading at 44 before the announcement and that it's 51 now. That's not because of their stellar earnings. Also I've been thinking about how everyone is blaming the DEC deal for the price problems of CPQ. The more I think about it the less I believe it. Most people viewed the deal favorably and agree it's the smart move. The deal was blamed for the price woes because there was no other explanation at the time. Now in light of what we know I find it very possible that the problems were of CPQ making. (Stuffing the channel,creative bookkeeping.etc) If the deal falls through i doubt that CPQ would benefit from it price wise. The asian problem still exists as one company after another warns or fails to meet their numbers. Whe the climate changes and CPQ gets their house in order the stock will rise. It's to good of a company to stay down forever but the correcting of things may take longer than many here would want to believe.

To: James F. Hopkins who wrote (23574)	3/28/1998 7:59:00 PM
From: rudedog	Read Replies (2) \| Respond to of 97611

CPQ was at 29 (58 pre-split) when the merger agreement was done. it had a brief run up to 32 and change right before the announcement but had pretty much been trading 27 to 30 when they were figuring the value. so current price is within 10% of the exact number and is certainly within the range they were looking at. One of the reasons for the half-cash half-stock deal was to buffer the value from short term stock price shifts. CPQ management has said several times that there will be no renegotioation, and DEC has a cash penalty ($250M I think) if the deal does not go through, which I believe includes renegotiation. I'm just looking at the public info on this but I think they will go forward with the deal as it stands. The real question is whether DEC shareholders unload or double down.

To: James F. Hopkins who wrote (23574)	3/29/1998 11:23:00 PM
From: Gerald Drews	Read Replies (2) \| Respond to of 97611

Jim - Assuming the buyout is approved, what are the DEC shareholders going to do with the cash and CPQ stock? Will they sell or double up? I think much of the shorted CPQ is probably DEC shareholders who intend to use their CPQ shares to close their short positions. Since this is a buyout the DEC shareholders will have to pay cap gains tax so this may reduce some buying by individual investors. The mutual funds don't pay cap gains so they may double up with the cash they get Approx 10% of CPQ shares and enough cash to buy another 10% will be placed in new hands. Jerry