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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (6855)	10/27/1998 7:40:00 AM
From: Kip518	Read Replies (1) \| Respond to of 8002

Herb Greenberg (TSC) has negative piece on GTW this morning. thestreet.com

To: Skeeter Bug who wrote (6855)	10/30/1998 5:01:00 AM
From: Kory	Read Replies (2) \| Respond to of 8002

<just data to analyze> sb, I find it hard to imagine you actually analyze data since you put almost no fact in your posts. It is full of speculation, innuendo, and opinion. I would love to see some legitimate analysis. <gtw had a nice write off last year. did that make eps look better? of course it did. by a lot? of course it did. > Silly comments again. Have you even bothered to look at what GTW wrote off? I'll provide a recap for your benefit: $60M - In process R&D on purchase of ALR (essentially goodwill) $45M - abandonment of internal use software (more intangibles) $9M - severance for facility shutdowns $49M - inventory write-down The only item in this list that could have improved future earnings by any amount is the $49M inventory write-down. Assuming the entire $49M of inventory was subsequently sold with no discount, with 160 million shares outstanding and a 40% tax rate, GTW could have possibly benefited future earnings by $.18 a share. Now, if GTW held this inventory more than a quarter, given price declines, the benefit was smaller. Given the large inventory level that GTW still had in Sept. 97, I doubt that the benefit was close to that. My guess is a 5-10 cent possible favorable impact, mainly in the 4th quarter last year. In any event, hardly benefiting "a lot". <the only issue is how legitimate it was. you're right, i don't have all the details. know why? gtw won't tell all the truth and even if they did i wouldn't believe them b/c they have shown themselves not to be credible. they say they will hit estimates and don't - while they are selling stock. they say "in like a lamb out like a lion" when the results proved them wrong.> I assume you are still stuck on the 5 cents a share that GTW missed the average analyst estimate by in Q2. Gee - guess what I just thought of? They exceeded the average estimate by 4 cents in Q3. Those dirty liars - they did it again. And look at that first quarter, they exceeded that estimate by 5 cents as well. You know, I just realized that 80% of all companies either missed or exceeded estimates this quarter. I think every CEO out there is a liar - can't be anything else. <as was pointed out, gtw reported shipments. why, kory> LOL - I think you just might have something there Agent Mulder. I seriously hope you were joking on this point. <name one stock that you really liked and then turned out to really dislike, kory.> I don't like or dislike "stocks". I like or dislike businesses and business models. I have only sold one company this year, that is Koala Corp. (KARE), which I sold in June after holding for about 3 years. Company is a great American startup story and made me good money. The reasons I sold were that the company started making lots of acquisitions which I did not feel were very strategic. In addition, although they have reported very good earnings for the past three quarters, operating cash flow has been essentially zero in sharp contrast to the previous three years. <you do make a good point about cash. cash is king and as long as it is growing things can't be all that bad. except when you consider valuation. btw, with all this cash, when do you expect a dividend? > GTW's cash balance has increased from $300 million last September to $1 billion this year. I calculate that is a $700 million improvement, or over $4 per share. Given that rate of progress, I think the increase in market value is reasonable and inevitable. As for dividends, I guess you are advocating your "bury the money in the mattress" theory again. I don't want a dividend from GTW. Why do I want to pay tax and have less money to reinvest? When I hit age 50, I will start worrying about dividends as well as moving my investments out of stocks. Kory