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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: rudedog who wrote (41010)	5/8/1998 1:37:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 176387

Dog, It is not speculation. The costs for the layoffs, the merger costs, the margin shrinkage are factual. CPQ makes most of its profit in the server niche which has had until now >40% margin. They have acknowledged that this is to be no longer. No one is saying that CPQ will shrivel up and drop off the face of the earth, but there is strong evidence that they have screwed up big time. Expect further margin compression. More restructuring charges and possible sharp revenue dropoffs if CPQ does not stuff the channels. This is relevant information to the DELL thread because CPQ is DELL's biggest competitor.

To: rudedog who wrote (41010)	5/8/1998 2:55:00 PM
From: Mohan Marette	Respond to of 176387

Hi rude: Ref:CPQ -Not quiet, supporting data was posted here on this thread with respect to the following. 1)Decreasing margin on servers and the like. 2)Highest growth from consumer side of the business particularly low-cost. 3)Lay off and approx 2 billion write down. 4)Stuffed channel to continue at least until June per management. 5)If Q1 was bad and 'stuffing' biz to is continue till June Q2 shouldn't be all that great. First two items can be found at one of the following sites.IDC/Market Intelligence/Dataquest don't recall which one,but these were posted here. That pretty much covers it don't it?????? Don't get me wrong you should do ok with CPQ in the long run but I am afraid not as much as DELL from the looks of it on the count of CPQ is a much bigger company with a lot more problems as opposed to DELL a smaller nimble and a much more focused company with better management and lesser problems.I guess that is all I am saying for right now.

To: rudedog who wrote (41010)	5/8/1998 2:56:00 PM
From: Jim Patterson	Read Replies (2) \| Respond to of 176387

Rudedog, Here is how CPQ beats Ests in Q3 and Q4. At the end of Q2, the Dec merger is done. CPQ will take a charge of a billion $$ or so, Probably more. It will include in process R&D, a charge for the layoffs, and an inventory charge. The charge may be 3-5 billion, I don't know. Most important is the inventory charge. Any inventory that is more than 2 weeks old will be written off at 0. In Q3 and Q4 when CPQ sells the machines, it will be @ 100% margin, or a reversal of the charge. Either way, it should be a big boost to the bottom line. And no one cares about the numbers for the year so that won't matter. As long as they can present an improving quarterly situation, the stock should be in good shape. remmember, You have to think, What would be the best way to bet the stock rolling to the up side. I like this tatick. Jim