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

To: Geoff Nunn who wrote (83806)	12/5/1998 9:38:00 AM
From: TCBinAugusta	Read Replies (3) \| Respond to of 176387

RE: Dividends As far as I am concerned, Dell does pay a "dividend" by having a stock buy-back program. This form of dividend is better than cash because..... 1. Neither payment of dividends or repurchase of stock is deductible to Dell, and 2. Reducing shares outstanding through a repurchase plan increases E.P.S. (fewer shares outstanding) making the stock market value increase. There is no tax to the long-term holder until the stock is sold! TCB

To: Geoff Nunn who wrote (83806)	12/5/1998 12:02:00 PM
From: Chuzzlewit	Respond to of 176387

Geoff, I think it does pay a dividend in the form of share buybacks. It just isn't perceived as such by the street. Since the third quarter of 1996 it has repurchased (net) 235MM shares (fully diluted and split adjusted). The issue is further complicated by two additional factors. First, Dell's model requires very little capital in order to operate, which means from a practical point of view it has very little in the way of capital constraints on growth. But there is the very real issue of management constraints. It is one thing to have the capital wherewithal to grow into new business ventures, but quite another to be able to successfully manage it (as you so ably pointed out in the case of CREAF). In short, a company needs the management infrastructure to properly grow. The only company I know of that seems to grow like Topsy without infrastructure problems or concerns is TYC -- a perennial white knight! Mohan published an article which indicates that Dell will begin manufacturing storage devices. And the recent posts concerning web sales in Japan indicates another area of business expansion. I get the feeling that these will be the areas of new strategic thrusts. TTFN, CTC