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

To: jim kelley who wrote (50361)	2/27/1999 5:40:00 PM
From: rupert1	Read Replies (1) \| Respond to of 97611

jim: Where did you get $1.8 billion? None of the analysts, in their formal analysis, accuse CPQ of channel stuffing. All analysts agree that CPQ has a reasonable inventory in the channel of 3-4 weeks. R-H is the only one that suggests that the incremental rise of a few days in channel inventory would slow down January sales, by a proportionate incremental amount. In identifying this feature, it did not suggest that this was "channel stuffing " in the pejorative sense or that it was grounds for not trustng CPQ. As I have said already, it then went on to recommend CPQ as a buy. Analysts believe that if the second half of February and the whole of March does not make up for softness in the first six weeks that the shortfall in revenues will be between 2-300 million. Where do you get $1.8 billion? Your general premises that somehow CPQ is "missing" the cost of inventory while it is in the channel is (a) a misconception of what "cash flow" means and (b) still unsupportive of your statement that it is missing $1.8 billion.