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

To: JRI who wrote (45383)	1/27/1999 8:03:00 PM
From: Thomas G. Busillo	Read Replies (2) \| Respond to of 97611

John, Kumar deserves a feature in Brill's content. It's great you've taken an objective view of him even when it may not have been popular. Below is an example of why I don't particularly find him to be anywhere close to the "unsung hero" image he's cleverly built. This is from an article yesterday on CNET: In order to meet projections of fourth-quarter sales, Compaq had to "stuff" about two weeks' worth of equipment into the distribution channel, theorized Ashok Kumar, an analyst with Piper Jaffray. "We think they were essentially forced to ship more units," Kumar said. "This cannot continue ad infinitum." However, while Compaq grew stronger in low-end systems, those aren't as profitable to the company, Kumar noted... ...Kumar also expects PC sales to "fall off a cliff" in the second half of 1999 as corporate computer budgets are redirected to dealing with the year 2000 problem. ...Kumar referred to Compaq's Internet activities as a "sideshow," noting that Internet search engines are "easily replicated" and that "competitive differentiation factors are very fleeting." news.com Today: "All of the upside was not true growth," said Ashok Kumar, an analyst at Piper Jaffray. "Compaq has a lot of accounting adjustments that helped boost the financials."... ...Kumar noted that Compaq also reported lower than expected operating expenses, which added to the bottom line. "One segment that was fairly strong in the fourth quarter was the consumer retail side where Compaq picked up significant market share," said Kumar. "But on the commercial side, we are starting to see signs of a slowdown." news.com So, before the earnings, his big "insight" is - they're channel stuffing. What happened to this great insight 24 hours later when the next piece ran? Why didn't he come out and state how dead-on accurate he was about the "channel stuffing" charges? In fact, forget Kumar's comment. CNET in writing on CPQ earnings in the 2nd piece makes no reference "channel stuffing" whatsoever. This is the same news organization - CNET. Same company - CPQ. Same event - earnings. Same source - Kumar. Same focus? Certainly seems like a different angle to me. What I can't figure out is how the editor there at CNET could let that happen. IMHO, it damages their credibility as a news organization if they are apparently unwilling to acknowledge the inaccuracy of a named source in a follow-up which heavily quotes the same source less than 24 hours later. Not only that, they let him drive the focus of the story. IMHO, Kumar's reputation (totally separate issue from his actual work product) is 95% knowledge of how to work the media. Good trading, Tom