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

To: art slott who wrote (4650)	2/4/1999 12:04:00 PM
From: Arrow Hd.	Read Replies (3) \| Respond to of 8220

Art, some random thoughts as we watch IBM wander here. Gerstner's annual employee presentation and pep talk had some interesting comments from what I have heard. He specifically blamed the fourth quarter shortfall on high end enterprise sales reps going on vacation. Makes sense if you think about it. G5 was announced in the summer and shipped in volume in the third quarter where sales reps sold at premium prices into the high margin accounts. In other words, picking off the low hanging fruit. Many had made quota by the time the fourth quarter started. Further, the 1999 game plan of the first half fast start was already out. Conferences were cancelled, quotas were being assigned already and the sales plan with its first half bonuses were already being published internally to the sales forces. So, what happens is business that could be sold and installed in the fourth quarter rolls into 1999. No need to stretch in 1998 since the measurements for many of the sales personnel were made. Gerstner said this in so many words on the CC. Was not happy about it at all. Said it displayed poor teamwork but that scenario has played out many times in past years so it should have been no surprise. To get out of the dog house sales teams are putting a lot of pressure on first quarter results. They also have had their quotas adjusted up and front end skewed. The other factor that has not been highlited this year on a macro basis is the money flow. Not only have market pundits been allocating more to cash but cash continues to flow in. At some point, a money manager will have virtually no hope to beat the averages or indexes if the market turns up due to the cash build-up. The merger mania is reducing stock and the IPOs are not offsetting it enough. This happened a few years back with the bull run coming in the early Spring lasting until the early summer but the winter was dead with everything wandering. Anyhow, it gives Treasury Operations a window in which they can buy in what they need, if anything, for the first quarter numbers.