Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Dr. David Gleitman who wrote (28324)	6/29/1998 1:26:00 AM
From: Dr. David Gleitman	Read Replies (3) \| Respond to of 97611

I'm thinking of writing some covered calls for CPQ. I already own 10K shares and wish to reduce my current paper losses. My problem is that I am unfamiliar with the specifics of writing covered calls. Any input would be helpful. Thanks, David

To: Dr. David Gleitman who wrote (28324)	6/29/1998 6:22:00 AM
From: SC	Respond to of 97611

David, I got this one today. I posted something related to this from Microsoft thread earlier. The cause of inventory problem? They failed to sell. What caused the failure to sell? Were Compaq's retail PCs less attractive or something else wrong? They definitely had one of the lowest prices. Let's hope it is not as bad as it seems from this report and that Compaq is not sitting still. Here is the latest from ZDNet that is similar to your story: zdnet.com PEOPLE'S CHOICE MONDAY, JUNE 29, 1998 Compaq Loses Top Spot as Retail Sales Plummet Aaron Goldberg, Executive VP ZD Market Intelligence Retail PC unit sales have been strong all the way through April. All that changed in May. Sales in May were not just down sequentially. The total volume was barely equal to the levels of a year ago. After four months of solid, 30%+ growth, why did the May crash happen so abruptly? For one thing, vendors have conditioned customers to expect ever-better deals and constantly falling prices. The first four months of 1998 were marked by continual price reductions and aggressively priced product bundles. That was not the case in May. In addition, customers know that most vendors will release brand new product lines in June/July. Since current products will be closed out at lower prices, why buy now? The new products will have more performance and better configurations, so waiting will pay off. Then there's the Win98 launch, which may have caused some buyers to wait until June 25 if they were buying new systems. Even if you were undecided on Win98, it made sense to save $90 by waiting until the end of June. The market share results show who was on the ball and who wasn't. And Compaq wasn't. Hewlett-Packard jumped into the No 1. spot in retail desktop sales. This is a first for the firm, and, frankly, a huge surprise because HP has been quiet for the last two quarters. Compaq got crushed. It lost more than 10 share points to fall into second place -- truly bad news. Adding insult to injury, the poor sales caused yet another jump in Compaq's inventory. The bottom line: Buyers will see real benefits in the next 30 days. Close out prices should be rock bottom, and cool new systems are on the way. Sales levels should go back up, but vendors aren't taking anything for granted anymore. Nor should they.