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

To: Chuzzlewit who wrote (47404)	6/12/1998 8:16:00 PM
From: Geoff Nunn	Read Replies (1) \| Respond to of 176387

Chuz, I wasn't arguing Dell should hold cash. I said I favor stock buy backs. I was simply pointing out that a stock buy back doesn't necessarily raise EPS, and may in fact lower it. Given my assumptions, when Dell takes money out of an interest bearing account, it gives up a yield of 3.5%. This was income that, being above Dell's average EPS of 2%, causes the revised average to fall. Let's assume the price of Dell stock is $100 and the p/e is 50. If the company takes $100 out of cash and uses it to retire one share of stock, it saves $2 in earnings otherwise claimed by that share. But taking $100 out of cash costs $3.50 in foregone interest income. This means the aggregate income which the remaining shares are entitled to falls by $1.50, causing a decline in EPS. To be sure, a stock buy back is actually retiring a stream of EPS, which although currently only $2, is expected to grow. That's why a buy back can be good policy, even though it may depress EPS for a time.

To: Chuzzlewit who wrote (47404)	6/12/1998 9:20:00 PM
From: Techie	Read Replies (1) \| Respond to of 176387

The best use of cash would be to invest in the business to grow it and if they don't know how to do that, it's to distribute it via dividends. " Execs of Acer have been talking for months of their desire to roll out a $300 PC. But such low prices hadn't been expected for at least another year. "Nobody is quite ready for those kinds of price points," says hardware analyst Stephen Baker at PC Data, which has been predicting that two-thirds of all PCs sold in the fourth quarter will be priced below $1,000 -- double the number sold in that price range a year earlier. " now let's see... if 2/3 of the market is going to be sub-1k by Q3, I wonder what % of the 1.5 billion PCs Mikey mentioned might be sub-1k by Y2K? Ooops, almost forgot the URL.. exchange2000.com