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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (56764)	6/3/1998 1:05:00 PM
From: Maverick	Read Replies (1) \| Respond to of 186894

Intel's stock value; FTC staff backs antitrust; Edelstone acknowledges INTC might pre-announce an earning warning It's time to check in with the two high-profile analysts having a $64-billion squabble over the value of Intel Corp. (Nasdaq, INTC) The little disagreement between Thomas P. Kurlak of Merrill Lynch & Co. and Morgan Stanley Dean Witter's Mark Edelstone is bigger than bragging rights for big shots. It has to with one of the most widely held tech stocks in the land. mercurycenter.com BY ADAM LASHINSKY Mercury News Staff Writer It's time to check in with the two high-profile analysts having a $64-billion squabble over the value of Intel Corp. (Nasdaq, INTC) The little disagreement between Thomas P. Kurlak of Merrill Lynch & Co. and Morgan Stanley Dean Witter's Mark Edelstone is bigger than bragging rights for big shots. It has to with one of the most widely held tech stocks in the land. For now, though, the quarrel is over, and Kurlak is the winner. We last visited Kurlak and Edelstone when several weeks back, when one share of Intel was worth about $84. Kurlak, noting overcapacity in PCs and the deleterious impact of the sub-$1,000 computer, predicted Intel's shares were heading for ''a new low . . . in the 60s.'' Edelstone, predicting a second-half surge from new Intel chips, set a 12-month price target of $110. Intel closed Tuesday at $69.25, a rebound from Monday's plunge to $68. It's impossible to overstate the importance of Intel's stock to the tech-investing crowd. It's one of the most widely held securities in the country. To wit, 18 million shares changed hands Tuesday, just a bit above the norm. So first to the man of the moment, New York-based Kurlak, who says ''things are pretty much following the track we had been estimating in this down cycle.'' Kurlak repeats the mantra Tuesday on the chip industry he has been pushing for the better part of a year: Overcapacity leads to lower earnings which lead to layoffs and reduced capital spending, and, ultimately, to lower stock prices. ''For whatever reason, investors have decided to focus on reality,'' he adds.

To: Paul Engel who wrote (56764)	6/3/1998 1:10:00 PM
From: Maverick	Respond to of 186894

Kurlak has an upper hand over Edelstone Kurlak dryly notes that paying customers get the first word when Intel has become ''cheap.'' But in a published report last week on the overall semiconductor industry -- of which Intel is the undisputed leader -- Kurlak made it fairly clear he's not ready to call the turn. ''Growing dissatisfaction with (semiconductor) investments during downturns can produce periods of undervaluation,'' he wrote. ''The cycle has not yet progressed to that stage, in our opinion.'' For his part, San Francisco-based Edelstone isn't backing down. Even though he's been recommending Intel since he arrived at Morgan Stanley last year, about $30 ago, he's maintaining his ''strong buy'' recommendation and $110 price target. ''We try not to jerk our ratings around if we can help it,'' he says, calling Tuesday from Boston. Edelstone acknowledges that the second quarter for Intel isn't working out as planned and even allows that the company could pre-announce a disappointing quarter. Noting that Intel told investors to expect second-quarter revenues to be flat or slightly down from the first quarter, he says his ''channel checks'' suggest that ''quarter-to-date sales clearly are not flat to down slightly.'' Edelstone still says the introduction of Windows98 software by Microsoft Corp. (Nasdaq, MSFT) could spark demand for PCs. Ditto for price cuts Intel will institute next week on two product lines. ''It's always darkest before dawn, and I think we're there,'' Edelstone says. ''I think (the second quarter) is going to be the trough.'' STAFF URGES ANTITRUST COMPLAINT AGAINST INTEL Mercury News Staff and Wire Reports Intel Corp. on Tuesday said it will use every opportunity to persuade the U.S. Federal Trade Commission to reject a staff recommendation for an antitrust complaint. The FTC's Bureau of Competition has notified the company that it is recommending the five-member commission bring an administrative complaint, charging the company with using its monopoly control over microprocessors and the informations needed to use them to coerce its customers by illegally threatening to cut off the flow of products and technical information to companies that would not share their intellectual property.

To: Paul Engel who wrote (56764)	6/3/1998 1:11:00 PM
From: Maverick	Respond to of 186894

The commission is expected to consider the case next week. Normally, companies that face a possible FTC complaint are given the opportunity to try to argue their side of the case to the commissioners individually. ''We will avail ourselves of every opportunity to make our case,'' said company spokesman Chuck Mulloy. He declined to comment on whether Santa Clara-based Intel, the world's largest chip maker, had scheduled any meetings with commissioners. Shares of Intel closed Tuesday up $1.25 at $69.25. The stock fell nearly 5 percent to a 52-week low Monday after Intel said it would delay by at least six months the general release of its Merced processor, its next-generation chip for high-end business systems. Analysts have also blamed the stock's decline from a recent high of $84.56 on May 12 on uncertainty about the company's future earnings in the personal computer market. A decline in growth of PC sales and rising competition from low-end chip makers have hurt the company's revenue, analysts said. It is that cutthroat competition that Intel is expected to cite in its defense of charges that it uses its dominance in the market for computer chips to stifle competition. The FTC's Bureau of Competition has recommended that the commission bring an administrative complaint charging Intel with unfair competitive practices, people familiar with the investigation have said. The allegations that Intel withheld from other companies technical information about the architecture of its microprocessors and chips were first made in private lawsuits by Digital Equipment Corp. and Intergraph Corp. Digital dropped its case after agreeing to sell its chip-making business to Intel for $625 million. Intergraph charged that Intel withheld the technical data to coerce Intergraph into giving up patent rights for its graphics computer chips. A federal judge has issued a preliminary injunction ordering Intel to resume providing the information. Intel is appealing the order. An FTC action against Intel would come as the Justice Department is pursuing a broad antitrust suit accusing software giant Microsoft Corp. of illegally defending its virtual monopoly in the market for personal computer operating systems.