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

To: Aitch who wrote (53656)	3/17/1999 2:53:00 AM
From: rupert1	Respond to of 97611

Aitch: Once again an invaluable posting, thanks. It is a check-list of all the issues/rumours that have buffetted the stock. Note: 1. It confirms that the potential $200 million hit will be from Brazil devaluation, not a shortfall in sales and that this is a one-time charge and cannot be extrapolated for the year as some analysts have done. 2. Mason was originally reported by Credit Suisse to have attributed 1 cent "charge" on the 1st quarter to a slowdown in January sales and 2 cents to the devaluation. B/S makes no mention of the 1 cent but ups the devaluation "charge" to 3-4 cents. 3. Mason appears more definite that the January slowdown was related to the introduction of Pentium III. But notice the subtleties. He was attributing some of it to buyers who wanted to buy the Pentium II at the discount they knew would be coming (and which has been announced) when Pentium III was introduced. This responds to those who argued that the incremental values offered by Pentium III are not attractive enough to have caused buyers to wait in January. 4. It re-affirms that BS has not been able to find any channel-stuffing. 5. It re-affirms that insider sales were normal and that there was insider buying. 6. Although B/S puts emphasis on "channel dislocation" as the root cause of the short-term problem, it makes clear that this is not channel stuffing. However, apart from stating that there is a restructuring going on in the balance between direct and indirect as well as price competititon, it does not convincingly indicate what, if anything, in this process is slowing sales. Indeed, B/S comments could be read to suggest that sales should be more efficient. 7. It states, and this is a first among recent reports, that sales are slightly ahead of CPQ plans. In plain English this statement is referring to the whole of the 1st quarter. But in context there is some ambiguity. It might have been intended to mean that March sales, which represent the majority of sales in the quarter, are ahead of plan.