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

To: Jim Patterson who wrote (55039)	7/29/1998 2:03:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Jim, 1) Why do ASP's matter? If ASP's fall, then revenue growth will be lower than it could have been if DELL could have avoided the problem. Net Net, Profits come from revenue and the slower it grows, the harder it is to grow EPS. When you are expecting no ASP decline, which is what DELL said 2 months ago and now you find that it is happenning [sic], I don't care what your come back is, Revenue growth will be lighter than we thought it would be 2 months ago. This is a negative for the Stock, not DELL the company but the stock. Jim, give it a rest. You don't know what you are talking about. I suggest you reread the chapters on elasticity and profit maximization in your college textbook for econ 101. TTFN, CTC

To: Jim Patterson who wrote (55039)	7/29/1998 2:06:00 PM
From: Sig	Read Replies (2) \| Respond to of 176387

Sheeeeez, Jim <<<<<I expect DELL to be below the whisper number and to announce another stock split.I also expect the stock to react negatively to this report.>>>> Dell is running almost 55 x2 with no news in a crummy market. If Dell meets earnings and splits it will stay well above 60 thereafter. Sig

To: Jim Patterson who wrote (55039)	7/29/1998 4:09:00 PM
From: SecularBull	Read Replies (1) \| Respond to of 176387

Jim: When you are expecting no ASP decline, which is what DELL said 2 months ago and now you find that it is happening, I don't care what your come back is, Revenue growth will be lighter than we thought it would be 2 months ago. This is a negative for the Stock, not DELL the company but the stock. I think the Street's expectations in this regard have already been tempered. I would watch what you predict about revenue growth. I think that high-end PC and enterprise businesses are doing very, very well right now (perhaps a good bit better than expected). This should off-set any (relative) flattening of revenues. Regards, LoD

To: Jim Patterson who wrote (55039)	7/29/1998 4:53:00 PM
From: Diamond Jim	Respond to of 176387

#1, is completely accurate, anyone who thinks other wise needs to go to the Intel thread and start reading the posts back in June 1997. ASP's matter, they matter a lot. jim

To: Jim Patterson who wrote (55039)	7/30/1998 10:11:00 PM
From: Kayaker	Read Replies (2) \| Respond to of 176387

I oughta have my head read, but I'm gonna take another whack at this: If ASP's fall, then revenue growth will be lower than it could have been if DELL could have avoided the problem... Profits come from revenue and the slower it grows, the harder it is to grow EPS. You cannot conclude this based solely on the fact that ASPs have fallen. First, component costs have fallen at a greater rate than ASPs. Second, when ASPs fall, the number of units sold goes up. It is therefore impossible to know if the EPS is up or down based on ASPs alone. This is a negative for the Stock You cannot look at Dell (and falling ASPs) in isolation. You have to compare it to its major competitors. The numbers released this week show that Dell is growing far faster than any of the other box makers, despite the fact that some of them were selling at firesale prices to reduce inventory. Earnings from these competitors were dismal. Therefore in this period of falling ASPs, only Dell (and possibly Gateway) is doing well. The others cannot continue selling at these low ASPs forever. So Dell gets healthier and the competitors get sicker. It is this contrast (and not just Dell's returns) that has a major (positive) affect on the stock price. PS. By the way, I told you last week that I was buying Aug calls when you were going short. I bailed out Tuesday (28th) morning. Care to compare returns?