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To: The KOF who wrote (2624)	2/22/1999 11:08:00 PM
From: The KOF	Respond to of 3645

Hey, Dan Niles (a.k.a. Jackass) got some more good press..... MUSINGS FROM THE STREET WHY ME? CRIES DELL By Risa Kaplan In just two shorts days, Dell (DELL) had 20% whacked off its stock price and $20 billion cut from its market cap - ugh sounds like a financial Freddy Krueger "Nightmare on Wall Street" flick to me. Very, very ugly. But the reasoning is even uglier. This company had the audacity to increase revenues 38% and increase earnings 51% from last year. A horror story right? The Street "boys" are acknowledging a well tracked, well anticipated event obvious to long term investors. Dell has grown up. In the last four years, Dell has done the unbelievable. But like many first rate companies, there is a time when growth begins to slow down. Friday morning, two business days before Dell earnings were to be announced, Dell-slayer disguised as a Robertson Stephens analyst Daniel Niles "predicted" Dell would disappoint on the revenue side. Dell wouldn't make $5.5 billion but rather only a little under $5.2 billion. (I know some CEO's who would die to have that problem). The Street went ballistic and acted like those obsessive compulsive parents I met when my son was in grade school. The parents were never satisfied when their child came home with a test score of 98. The kid never wanted to admit he didn't get a 100 because his folks would yell at him. He wished his parents expected less. This doesn't seem much different to me. Dell, like that kid, knows there is good news in being downgraded. Now along with some of the great stocks such as IBM, Nike, and Intel the reality-bites moment has arrived and the benchmark gets lowered. Analysts will " reevaluate Dell". Dell can blow out the numbers again. And the beat goes on. A friend of mine believes bad-mouthing Dell, over the years has become a fine art. His take - Dell gets little support from the sell-side because the investment banks don't benefit from Dell anymore. It has never done a secondary, or a convertible, and only once sold bonds. There is nothing to keep the sell-siders from keeping the stock up. Over 112 million shares were traded the day after the earnings were announced. Was the selling a sign of the entire Street losing faith in Dell? Not necessarily. Some managers are married to a forecast model mandating selling a stock not meeting a specific target. With the rapid loss of share price over two trading days, many stop losses were hit, and technical sell programs were triggered. But what about Mr. Niles and his press release? I was surprised by his bold negative target of $80, considering on February 2nd Dell hit $109. Hmmmm, when was the last time an analyst pulled that two days before earnings? I don't have a problem with a negative forecast warning investors something bad is going down. Isn't it odd in the last 30 days earnings were raised by First Call's 31 analysts from 27 cents to 31 cents? Where was Niles then? So where did this wake-up-and-smell-the-Dell-numbers come from? I thought analysts were paid to figure this stuff out all year long and factor it in before. It isn't as if Compaq and IBM just announced last week they were going into the corporate order business from the floor game. Mr. Niles came up with those numbers: a) with the help of a Ouija board b) when he heard Tom Kurlack was resigning from Merrill Lynch, he deemed himself the heir apparent. c) when someone, maybe even at Dell, leaked them, in order to prevent a major debacle. Personally, I have to vote with C. To minimize a major tankage which could have translated into a minimally 30 point loss Wednesday morning, someone whispered into someone's ear. Bad news coming from a different messenger would help buffer the blow. And yes, he was mighty accurate in his under $5.2 billion number. The media and investors were forced into a guessing game but readily prepared. In the investment community today's news is tomorrow's bird cage liner, and Niles, like all the rest is only as good as his next downgrade. Risa Kaplan is a financial writer living in San Francisco. She started writing at the Motley Fool and is presently a contributor on the Microsoft Investor site. Full disclosure: She owns Dell stock The words and meanings expressed above are those of Risa Kaplan and not of The Bull Market Report, Inc.