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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (354)	5/26/1998 8:19:00 PM
From: porcupine --''''>	Read Replies (2) \| Respond to of 1722

Buffett on Briloff An owner (not Wayne) of Berkshire stock who attended the most recent "Capitalist Woodstock" in Omaha, had the opportunity to ask CEO Warren Buffett his opinion of Abraham Briloff's charge that Disney had employed a secret reserve fund (which had just run out of "reserves") to inflate Disney's reported earnings in the past few years. In a letter to Barron's (May 18, 1998, p. 66), this shareholder wrote, in part: "Buffett said he was well aware of Briloff, that Briloff had sent him letters pertaining to the controversy and that, after close examination, Buffett had concluded that Disney's accounting is fine." [Btw, when Buffett does a "close examination" of a company's financials, it is a very close examination. --''''> ]

To: porcupine --''''> who wrote (354)	5/27/1998 10:38:00 AM
From: porcupine --''''>	Respond to of 1722

Government preparing charges against Intel By David Lawsky WASHINGTON, May 26 (Reuters) - Government lawyers are preparing charges that Intel Corp. -- maker of chips at the heart of nearly all personal computers -- illegally abused monopoly power to hurt rivals, sources familiar with the case said on Tuesday. Within the next week, top staff at the Federal Trade Commission will review the proposed charges against the Santa Clara, Calif., company, which makes the microprocessors running four out of five PCs, the sources said. Soon after that, the five-member commission may vote to approve narrow charges against the company. Those charges are likely to be broadened later. The move comes as the Justice Department and 20 states are pursuing major antitrust actions against Microsoft Corp. which, together with Intel, dominates the personal computer industry. The Intel charges will likely be heard before an administrative law judge rather than a federal court, if the FTC follows the pattern it has set in the past. "I can neither confirm nor deny that," said an FTC spokeswoman, noting that the agency never comments on pending decisions. A spokesman at Intel was equally taciturn. "We have no comment about speculation about what may or may not happen," the spokesman said. "It is a nonpublic investigation. But we continue to cooperate and meet with the staff of the commission." However, the FTC's public statements have sent a signal that it has reasons to move against Intel. And some of the broad outlines of the case are also obvious publicly, in part because of activities that took place far from Washington. Last month, a federal judge in Alabama ruled that Intel used life-and-death market power to chop off information and enabling technology that Huntsville, Ala., computer maker Intergraph Corp. needed to stay in business. The judge issued a preliminary injunction ordering Intel to provide the same kind of service to Intergraph it provided to other customers. Intel followed the order but appealed. The FTC has studied that decision and Intel's similar actions against computer equipment maker Digital Equipment Corp. The cases provide the factual basis for the FTC to make assertions similar to those Intergraph made in its private antitrust lawsuit: that Intel is violating the law by using its power to force others to give up their trade secrets or cooperate with Intel. "The dispute is largely a legal one rather than a factual one, and therefore something the FTC could move quickly on," said Howard Morse, a former FTC official who is now a partner at the Washington law firm of Drinker Biddle & Reath. Rivals also complain Intel has changed its latest sockets -- which seat its chips -- to be incompatible with existing systems, and the judge in the Alabama Intel case agreed. "This 'closed architecture' for practical purposes allows Intel, by exercising its intellectual property rights ... to wield absolute power over who will and who will not be allowed in that part of the high-end computer industry that is based on the 'x86' architecture," ruled U.S. District Judge Edwin Nelson. "x86" is a shorthand for the series of processors produced by Intel, such as the 286, 386 and 486. The 486 family of processors was followed by Pentium chips. Intel does not argue about what it did, only about what its legal rights are. The chip maker may be called in next week to explain its legal views to the FTC staff, before the staff takes the case higher. Those meetings -- standard in such cases -- are private. But much is already public. The FTC must first assert that Intel holds a monopoly. It already has. When it brought charges against Intel in April for its actions against Digital, the FTC said, "Intel has market power in the market for the supply of high-performance, general-purpose microprocessors that are capable of running the Windows NT operating system. Intel accounts for nearly 90 percent of dollar sales and nearly 85 percent of unit sales of such microprocessors." Microsoft Corp.'s Windows NT operating system, which runs on networks of computers using Pentium chips, is heavily used by businesses. The government said Intel also holds a monopoly in stand-alone personal computers' chips. "Intel also has market power in the market for all general-purpose microprocessors. Intel accounts for nearly 90 percent of dollar sales and 80 percent of unit sales of general-purpose microprocessors," the FTC said. Intel, together with Microsoft, dominates the PC industry with the so-called "Wintel" machines which typically run Microsoft's Windows operatings sytems on Intel chips. If the government acts against Intel, it will have moved against both halves of the "Wintel" combination. Last week, the Justice Department and 20 states filed a major antitrust action against Microsoft.