John:
There are comments I could make with respect to Mr. Muffei,....oh well, better leave well enough alone. Let's just say, that so far this quarter, ALL the HARD info as well as what I get from the field suggests that his overworn and non-numerical statement provides little to hang one's hat on. Keep in mind as well that although you prefer to leave revenues out, and MSFT couldn't care less what the price point of a PC is, all of the other players care a lot.
Whether Intel warns or not is immaterial to me, as I know what a mess the micro market is. See my earlier posts for details.
Do you attach any validity to the IDC 14% figure for 1999, given a total lack of supporting evidence to back that view up and a ton of evidence of an ongoing glut? Based on their perfect track record of never having come close, I don't.
My point of view is rather simple. Supply continues to swamp demand in PCs and semis. I prefer to be short that situation, especially when the third factor, serious over-valuation is present.
Now to Dell.
My main delight in Dell, and the fact that continues to cause salivation is "50 times book". Less than a handful of stocks EVER get to this stratospheric level, and when they do, the appearance of even the tiniest wart or pimple causes a swoon. ANYTHING not perfect, and the shorts win. The environment for PCs is not conducive to perfection. (g)
Unfortunately for Michael, the arena in which he skates is getting crowded, and the wimpy types have been put over the boards. Those still on the ice are as muscular as he is, and, as I said earlier, it is a case of big tough gorillas fighting over fewer bananas. I have a grin over this, especially when the ninnies come in and jack the stock up, right after a nice profit has been taken. (g)
Your comment about Dell taking huge market share this year (point 1.), based on last year's results is wishful thinking. Last year, the high end of the PC market was still alive and well. Dell told his faithful that he would "never sell" into the bottom end of the price spectrum as there are "no margins there". I agreed with him then about the lack of margins at the bottom, but I also stated on this thread (look it up if you want) that he would, in short order, be forced to scrabble for mousy margins down there in the gutters, as that is where the market was heading. I also noted that he would be coming late to the party and that he would have no brawling experience,....rather useful in the alleys. He still doesn't have competitive low end product, so he's already in trouble.
Additionally, his "direct sales" niche, has become more crowded than the L.A. freeways. Crowds always hurt margins, even when things are not in glut. Worse still, he sells primarily to business and government, both of which are taking a buying holiday. He's toast on this point.
Point 2 has no basis, other than being "above plan". I don't know what the plan is or was, and I don't care. It is a dumb phrase used whenever someone wants to mask something. As far as the $300.0 m "roll-over", again, spare me the hype and show me the sales, especially given the above-noted nasty environment.
I can tell you for an ever-loving fact that if you took the time to go visit even 3-4 stores and asked ANY of them about "rollin" P3 sales, they'd hoot you out the door, and deservedly so. It's already a well-recognized bomb. P3 sales will not help Dell or anybody else for that matter.
I may be wrong, but aside from CPQ's well deserved reputation for outright lying, are you forgetting their earlier comments about how things are going?
Those "stuffs" you reference hurt everybody, not just the perpetrators. I recall last year, when HWP called CPQ every name in the book for "hurting everybody in the game" by stuffing the channel. It hurts Dell too. Everybody has inventory to clear and prices get squished. Dell has to respond to this with equivalent price cuts or lose market share.
Michael owned up to losing market share as a result of not cutting prices enough. It gets worse by the day, so he will have to do plenty of price slashing to maintain market share, never mind gain some. Hello margins.
You talk of horrible fears,...I haven't seen anything that resembles fear anywhere, except in the stores where the PCs are sold. Wait, my friend, you will shortly be provided a more vivid understanding of fear.
I'm not trying to beat up on you,...I just think that this is the first 10 seconds of a 15 rounder. Michael's stock is going to be pounded, not so much as a result of what Michael does or doesn't do, but because of the fact that he is now in the wrong business at the wrong time, and that the expectations for his stock are silly. The margins used by many who trade his stock aggressively, also suggest an overshoot, when things come to a head,....also not his fault. In summary, I think he is a very bright lad to be selling as aggressively as he does. Usually makes sense to be right along side the insiders when they are at the sell wicket frequently.
Best, Earlie |
