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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: jim kelley who wrote (51221)	3/10/1999 5:34:00 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

Jim, I have yet to hear of a small business VAR carrying Dell, especially not in the size needed to make up that receivables pump. And I think it is highly suspicious that a revenue miss would follow their most outrageous mismatch in revenues and receivables in years. Also, between 3Q and 4Q was when the insiders sold in such size. Not just MD, but nearly all of them sold off substantial holdings, moreso than in previous years. That makes me suspect a pump. I just wish I was in on the details. There are lots of permutations that will have lesser or greater impact on Dell's eps. For example, "the machine you wanted in November was delivered in October and you get any price cuts that take place between delivery and original target delivery date." That would have little impact on SG&A in the future. But, "please take a lot of boxes in November and pay for them in April and you get the highest price cut on any of our products over that period of time," would have huge impact. That is where I am in the dark. Magnitude of impact. I do think it is notable that the pump was nearly all Celerons. The PII buyers would be waiting to see if PIII was more than a tweak. But Celeron buyers bit at the buy now, pay some day concept. MB

To: jim kelley who wrote (51221)	3/10/1999 7:09:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 132070

Jim, you are obviously lacking in Burke-speak, so for your edification here is how it works. If receivables go up in a greater percentage than the sales increase, then that's bad because it means that the company is obviously extending goodies to purchasers. Never mind the fact that margins didn't move materially. And ignore the fact that the Cash Conversion Cycle decreased. Now if the receivables dropped in relationship to sales, well that's bad too because it means that growth slowed down towards the end of the quarter. So what if that interpretation is totally inconsistent with the prediction of decreasing sales at the beginning of the quarter due to the increase in receivables in the previous quarter. Remember, this is Burkian financial analysis! Finally, if receivables increase in exact proportion to sales, well that's bad too, because that obviously means that Dell is unwilling to compete on price or terms in an imploding market. So you see, if you are dealing with Dell, any number listed on the balance sheet as a receivable is bad. TTFN, CTC