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

To: Night Writer who wrote (48819)	2/18/1999 5:37:00 PM
From: fooledalot	Respond to of 97611

NW, Thanks for your effort and thoughts. f

To: Night Writer who wrote (48819)	2/18/1999 5:44:00 PM
From: Bretsky	Read Replies (1) \| Respond to of 97611

Just wondering for viewpoints on whether I should sell CPQ for MSFT ?

To: Night Writer who wrote (48819)	2/18/1999 5:51:00 PM
From: rupert1	Read Replies (1) \| Respond to of 97611

NW: What is your short-term prediction for CPQ? I think that people are too reactive to rumours of channel stuffing. They are created by people who have an interest in keeping alive what was a bad mistake that took place in 1997. Everytime a CPQ executive shows his face he gets asked about it - nobody seriously thinks that they are not aware of its sensitivity. Can you imagine them doing it again - especially when they now pride themselves on the speed of the inventory turnaround and the new measurement standard using out of channel. My understanding is that DELL is not geared up for low-priced units. COMPAQ is. It would be contrary to DELL's philosophy and strategy to start a price war with CPQ for low end products. CPQ would win it and DELL's margins would be seriously eroded. The threat from higher priced components is universal. It would have the effect of raising prices uniformly in the industry, so that margins could be protected. But DELL would benefit less because it does not hold inventory. I would suspect that it does not have the same advantage as COMPAQ in preferential contracts with component suppliers arising from COMPAQ's policy of building for inventory. In the absence of rudedog, does any other informed person want to comment on these issues?