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

To: Dell-icious who wrote (42407)	5/15/1998 5:08:00 PM
From: S. Chiang	Read Replies (1) \| Respond to of 176387

Here is the history, so we know what "happened" after the expiration date and where we "possibably" go from here. I didn't mean to predict the future based on the history. Just for reference. April options expiration date is 4/17. It closed at 67 1/2, one of the highest open interest striking prises. Note: ignore volumes here. They are not correct. 5/14/98 95 1/4 96 3/8 97 5/8 95 22,984,800 5/13/98 98 1/4 95 13/16 98 1/2 95 1/2 245,420 5/12/98 94 3/8 91 94 3/8 90 1/2 16,061,700 5/11/98 90 3/8 93 94 15/16 90 1/4 21,780,600 5/08/98 91 3/4 89 1/16 92 85 15/16 13,961,200 5/07/98 86 5/8 87 3/4 87 13/16 86 1/4 78,135 5/06/98 87 7/16 89 1/16 89 1/8 87 1/4 9,133,400 5/05/98 87 11/16 87 7/8 89 1/4 86 1/8 11,502,700 5/04/98 88 84 15/16 88 1/2 84 5/8 161,416 5/01/98 84 1/4 81 7/8 84 1/4 80 3/4 118,329 4/30/98 80 3/4 79 81 3/8 78 14,138,800 4/29/98 77 5/8 76 3/4 78 1/16 76 1/4 8,854,200 4/28/98 76 1/16 77 1/4 77 5/8 74 5/8 11,675,800 4/27/98 74 5/16 74 74 1/2 72 3/8 156,611 4/24/98 76 5/16 75 1/8 77 1/4 74 7/16 9,569,200 4/23/98 75 1/4 77 3/4 78 75 1/8 10,453,800 4/22/98 77 7/16 75 79 5/8 74 3/4 15,442,000 4/21/98 74 3/8 70 9/16 74 7/8 70 1/2 12,731,700 4/20/98 69 11/16 67 5/16 70 1/4 67 1/4 9,315,500 4/17/98 67 1/2 67 1/8 67 7/8 66 3/4 3,950,500 4/16/98 67 5/8 67 3/4 69 66 7/16 6,265,300 4/15/98 67 7/8 69 3/8 70 1/16 67 3/4 8,316,900 4/14/98 68 5/8 67 1/8 69 5/8 66 5/8 11,961,000 4/13/98 67 21/32 68 1/8 68 1/8 66 1/4 6,571,200

To: Dell-icious who wrote (42407)	5/15/1998 5:13:00 PM
From: S. Chiang	Read Replies (1) \| Respond to of 176387

Again, this is the history data around March expiration date 3/20. It also almost closed at the most popular striking price 62 1/2. 4/17/98 67 1/2 67 1/8 67 7/8 66 3/4 3,950,500 4/16/98 67 5/8 67 3/4 69 66 7/16 6,265,300 4/15/98 67 7/8 69 3/8 70 1/16 67 3/4 8,316,900 4/14/98 68 5/8 67 1/8 69 5/8 66 5/8 11,961,000 4/13/98 67 21/32 68 1/8 68 1/8 66 1/4 6,571,200 4/09/98 67 11/16 67 15/16 68 3/4 67 1/4 12,718,200 4/08/98 65 3/4 63 13/16 67 1/16 63 13/16 14,013,600 4/07/98 63 1/8 64 1/16 64 7/8 62 5/8 10,854,600 4/06/98 65 1/4 67 67 1/2 64 5/8 10,206,700 4/03/98 67 3/8 68 1/2 68 3/4 67 7,253,000 4/02/98 68 1/8 68 3/16 68 13/16 67 7/16 9,158,600 4/01/98 68 1/2 68 68 3/4 66 1/2 7,852,700 3/31/98 67 3/4 67 11/16 68 7/8 67 1/2 7,740,100 3/30/98 67 3/16 67 9/16 68 3/16 66 7/16 6,183,200 3/27/98 67 1/2 69 69 1/8 67 3/16 8,398,700 3/26/98 68 1/2 68 3/8 69 1/4 67 1/4 9,568,000 3/25/98 67 15/16 69 1/16 69 1/8 66 7/8 19,952,500 3/24/98 65 1/16 62 3/4 65 5/16 62 1/4 10,682,100 3/23/98 62 1/4 62 63 1/4 61 3/16 11,040,500 3/20/98 62 7/16 64 7/8 65 1/8 62 1/4 11,734,500 3/19/98 64 3/4 63 1/2 64 7/8 63 1/2 8,202,000 3/18/98 63 1/4 61 5/8 63 3/4 61 1/2 11,042,000 3/17/98 62 5/16 63 3/8 63 1/2 61 5/8 10,602,000 3/16/98 63 9/16 63 7/8 64 1/4 63 1/16 6,756,500

To: Dell-icious who wrote (42407)	5/15/1998 5:55:00 PM
From: Dell-icious	Read Replies (2) \| Respond to of 176387

thestreet.com Titled "Quant View: Dell's Valuation is Unsustainable" by Ted Murphy, here are some excerpts from it: Dell Computer's (DELL:Nasdaq) price-to-earnings multiple is now higher than Microsoft's (MSFT:Nasdaq), at 47 times 12-month-forward estimates versus 44. I find that amazing -- and unsustainable. The PC hardware environment is too competitive for Dell to maintain this kind of a premium over the long term. Short term, I note that Dell is expected to report next Tuesday after the close. Expectations are for a strong quarter. (Chart of price and P/E ratio since 1996) PC makers face continuing price competition and relief seems likely to remain elusive. As IBM (IBM: NYSE) CEO Louis Gerstner said in an otherwise upbeat speech last Wednesday, "We're in a [PC] price war right now, and we intend to compete and protect our market share." Gerstner's sentiment is echoed by Compaq (CPQ:NYSE) and Hewlett Packard (HWP: NYSE). At some point, Dell's competitors will catch up, and Dell's valuation on earnings will contract. I've bought 11 Dell PCs so far this year, which is a strong personal testimonial to the quality of the company and their products, but I have no loyalty towards Dell. For a given configuration, I'll take the cheapest box offered by the top brands: Dell, Compaq, Hewlett Packard and IBM. Earnings estimates and revisions for Dell continue to trend upwards, but the rate of growth seems to be slowing. (Chart of estimated earnings and suprises) Dell has done a tremendous job harnessing the power of the Internet to expand their customer base and productivity. In the process, however, they've released the genie from the bottle. By providing an even-handed marketing and distribution network, the Internet will continue to act as a catalyst, driving prices on servers and high end workstations down to their marginal cost. The table below shows the valuation and size of the largest technology companies in the U.S. I note that Dell's market cap is now 29 percent larger than Compaq Computer, which I see as a further indication of Dell's valuation being excessive.