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

To: jim kelley who wrote (105510)	2/26/1999 7:20:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 176387

Jim, it's still pretty difficult to say how much on that basis. I think we'll get the true picture once we get the first quarter's numbers in. Historically Compaq's sales drop 11.9% Q1/Q4. If there is a bigger drop we'll know just how much they stuffed. Incidentally, last year may be a bad base quarter because they stuffed like mad, and you can clearly see it because Q1 dropped 22.5% over the previous Q4. Anyway, congrats on a fine call! TTFN, CTC

To: jim kelley who wrote (105510)	2/26/1999 11:17:00 PM
From: Chuzzlewit	Respond to of 176387

Jim, remember the cash flow problem you pointed out was looming with Compaq? Check this out from the fool: fool.com In a nutshell, Compaq's cash flow is awful even before taking into account the cash outflow for prior restructuring costs. Cash flow for the year was down over $3 billion to $644 million. Through nine months, cash flow was down $2.1 billion to $700 million. Is this the rogue capacity that's going to wreck the entire industry? It's definitely not helpful to be standing near an elephant bull when it goes rogue. Let's be serious -- Dell's quarterly revenue and unit growth were strong, but a little less strong than expected. It might have been too careful on pricing (as if that's a bad thing), but there was nothing wrong with its cash flows. Compaq, on the other hand, has signs of dysfunctionality. Confusing its problems with the state of the rest of the industry is a mistake unless the thesis includes Compaq's screwing up things with pricing. It's not the industry that is slowing down, it's Compaq and its entire distribution chain that is stumbling that is causing these problems. Can the direct PC companies deal? I think so. Congrats on another great call! TTFN, CTC