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Technology Stocks : Digital Equipment Corp. (DEC) -- Ignore unavailable to you. Want to Upgrade?

To: hossein hosseini who wrote (3162)	6/18/1998 5:52:00 PM
From: Captain Jack	Read Replies (1) \| Respond to of 3276

hosseini --- CPQ is a good trading issue but IMO a better hold issue. I do trade it a bit but like HWP better for trading, look at the amount of times it can be bought in the 58 - 60 range and sold in the 66 - 68 range every year. I do not catch every one of those trades but manage 4 - 6 per year. One more down grade and this will bottom lower. ASIA may kisk all my plans in the a*s but I will keep playing. COMS is good in the 24 1/2 - 26 1/2 range. If you get stuck with it just keep it until 35... works the same as CPQ!

To: hossein hosseini who wrote (3162)	6/19/1998 8:58:00 PM
From: Tom M	Read Replies (3) \| Respond to of 3276

Hossein/George threaders, Let's put CPQ under the microscope. How bout for 'ol times sake, we do a DEC on CPQ? It's hard to find a place where two sided analysis is encouraged. I've been trading in and out of CPQ since the announcement, and have stayed out since around 33 - keeping a low ball open order in. After living with DEC's low-valuation-frustration for many years, I'm having a hard time thinking that CPQ won't set new lows based on its contrary high valuation for DEC-like performance. CPQ has held up very well IMO for its fundamentals (4.4 x book & no earnings vs guidance of consistent growth). Mgmt has time-released the information very well which we'll find out will either work or it won't. It's obvious now CPQ was in big trouble and lying in its guidance. -stock momentum kept going while earnings coming in & further boosted towards end of momentum with a stock split. -mgmt denied stuffing the channel in early press releases (although they did), keeping the price up pre-DEC merger -DEC merger proposal announced with fixed terms ($30 + ~.945) while CPQ around $34 -After merger announced, evidence of channel stuffing surfaces, & CPQ warns that quarter will be about break-even (over .50 off if I remember). -Investors hoped they were low-balling the street, but the report came out at .01 eps, with another warning that the next Q would be about the same. -News of a stock buyback (and a 1M block transaction goes by the tape) is announced as a little sugar for the medicine. -Once stock is propped back up again, 3rd Q is announced to be a "transitional" quarter ie 3rd blown-down Q in a row, with more information to follow after Q2 ends. (buyback going on...) -rumors of channel still stuffed after 2 Q's lead to talk of about $1B charge for the Q. (buyback going on...) -merger charge of over $5B announced vs earlier estimates of just over $2B. CPQ's large cash supply not starting to look so large. (buyback going on...) For CPQ longs, management should be commended for maintaining the stock price - even at $28 it's still double where it was about 14 months ago after all that! New buyers were mislead by following unrealistic and unrevised earnings estimates. I'm thinking that if all the facts were had around the same time, CPQ would have been in the high teens. So, does the fact that they were announced piece-meal make them not add up to the same result - so far apparently yes. I'm of the opinion that once CPQ starts testing some lower 20's and all the new purchasers start actually losing money, there may start to develop a big "show me the money" attitude. This certainly happens with the acquiring co in most mergers I'm familiar with. CPQ mgmt: fool us once, shame on you, fool us 2 or 3 times .... I think we all see huge potential in the long run, how bout some realistic fluctuation analysis for the shorter run? Hossein, didn't you mean in your post your TA friend did NOT like the CPQ chart: >> My TA friend tells me he does like the chart for the fact that since last October, every time that CPQ has moved, it has made lower Highs.<< The fact that the last three rallies in the up direction have been setting lower highs is bearish as I understand the chart. thanks in advance for any discussion, Tom