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To: Key West who wrote (52689)	7/21/1998 1:07:00 AM
From: K. M. Strickler	Respond to of 176387

gp, Looks like Oppenheimer has a lot of CPQ stock to justify to their 'poor(er)' investors. I wonder if this guy has ever seen the inside of a computer? Regards, Ken

To: Key West who wrote (52689)	7/21/1998 2:31:00 AM
From: JRH	Read Replies (1) \| Respond to of 176387

<<<<<This is why our positive ratings (Compaq and IBM) are on stocks that have a broader and higher-margin solution* to sell in the corporate market.>>>>>>* Last night, on a local am radio station, I heard that recent outcry that cpq's most profitable sector is the sub 1k's. According to CNN and some employee at cpq, "the sub 1k's were bringing in margins in the low teens." Are they saying that they are making less than that on their higher end servers! Well I certainly am glad I own Dell! IBM is in a great position with their hard disk division and high end server enterprise. It is definitely a win/win situation for them, since even if a consumer does not buy a 6000, they are at least still buying IBM components (the majority of disks and components of disks are currently supplied to upper end servers via their San Jose operation, surprisingly one of IBM's largest revenue and margin producing operations) I would beg to differ with that assertion regarding higher margin solutions in cpq's case however. What higher margin solution? Low revenue consumer sub 1k's? What a joke. Ryan

To: Key West who wrote (52689)	7/21/1998 12:28:00 PM
From: Chuzzlewit	Respond to of 176387

Gene, analysts for security houses seem to fall over one another to try to come up with the most outlandish unsupportable conclusions possible. This one is no exception. For example: This [lower price for CPQ computers than Dell computers] suggests that the price advantage direct vendors had on new products because indirect vendors were mired in moving older systems first before they could drop prices on new configurations may be over. It also suggests a glut of inventory that they are trying to clear. CPQ's $.02 earnings this quarter suggests profitability is down quit a bit. But perhaps the "analyst" missed these subtleties. No, no, he didn't miss them at all. Look he says: ... we suspect that, even after all semblances of inventory excess for Compaq disappear, we believe Compaq pricing will remain extremely competitive because of the margin subsidy possible from the DEC businesses ... Aha, this is the Jim Patterson school of economics. See Compaq no longer has to worry about making money in computers -- it will live off of DEC's profits! And based on this cogent analysis he rates CPQ a "buy". He's set to play the Tin Man in the Wizard of Oz How much do you suppose this guy gets paid? TTFN, CTC