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

To: Jim Patterson who wrote (41542)	5/12/1998 12:59:00 PM
From: Walt Corey	Read Replies (1) \| Respond to of 176388

re:The stock would not be as high, but they would have some 3-5 billion or so in cash. I am not so sure about that. I've always heard you compute earnings/share * multiple + cash/share to compute fair market price. Stock buybacks send a really strong message to the street. Cash on hand sends a really strong msg to would be purchasers. WC

To: Jim Patterson who wrote (41542)	5/12/1998 1:12:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176388

Jim, I think you still don't understand the purpose of stock buybacks. These are dividends, and they work especially well when management believes the stock is undervalued. Look at the dividend aspect. When shares are retired into treasury the effect is to increase EPS, and hence to increase the price of the shares. But this price increase is not subject to taxation as a typical dividend would be -- it is taxed only when the security is sold. And when it is taxed, it is taxed at the capital gains rate rather than the ordinary income tax rate. The other point on which you constantly err is that Dell has been an historically debt-free company. This is not true. Historically they have carried debt. In FY1997 they retired $95MM in 11% bonds. I suggest you check the 10-K on this issue. TTFN, CTC