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

To: CRICKET who wrote (110476)	3/21/1999 5:52:00 PM
From: Stonehenge	Read Replies (4) \| Respond to of 176387

Anyone have an opinion about this??? Dell and IBM - Investment Ideas By The-Adviser.com - Sunday, 3/21/99 originally released 3/21 VISITORS Your Money Stocks Mutual Funds Bonds Retirement 401(k) Plans Investment Ideas Quotes News Ask The-Adviser HIRE US Benefits Available Services "Interview Us" Fee Information Disclosures Applications Clients Only ABOUT US Background Philosophy The Press Policies Opportunities Stock Quotes New York - IBM's well publicized strategic technology deal with Dell was believed to be one of the largest technology deals ever announced. The pact made IBM the most important strategic partner of Dell. Dell will benefit from IBM by gaining access to high-end technology that will allow it to sell more expensive enterprise systems. Once the publicized deal was announced, Dell and IBM continued talks about a possible merger or acquisition as it relates to IBM's PC division. Like a failing marriage, IBM raised the stakes on its current spouse - in this case - its own PC division. Talks with Dell have been put on hold but the dating continues. IBM has formally started "working more closely" with Dell and has made their own PC division turn into a jealous spouse who believes there is something more going on. The question is not if - but when IBM will cut the strings to its money losing PC division. Dell appears to have wanted the deal more than IBM. Dell management - led by Michael Dell - saw the next deal not as a buyout or as an acquisition but as a chance to continue to drive Dell's unit volume sales up and reduce overall costs. Dell has some short term revenue problems and business concerns that he is attempting to fix. For the first time, there remains a possibility that unit sales increases will not be sufficient to offset price due to offset price declines. The move towards large machines was one way of dealing with the problem. The acquisition of Dell by IBM or the PC outsourcing Dell was another. The talks, if concluded, would have had Dell take over the manufacturing of Old CO IBM branded machines and reduce overall component costs. The talks also included an outright acquisition of Dell by IBM - something that Michael Dell agreed to since he would have been groomed to be the successor to Lou Gerstner - a fitting legacy to his career. The story, which was broken exclusively by The-Adviser.com remains a hot topic. Merrill Lynch, in their latest report on IBM concludes "We think the end game is IBM rebranding someone else's PCs on the desktop." We tend to agree. Whether or not IBM buys Dell or outsources the manufacturing of PCs to Dell remains a financial issue and not a business one. Both companies see the righting on the wall. The talks for now, as we understand, broke off due to price. IBM felt that Dell's current price was too high and was not willing to pay a premium or short change their own shareholders. With both stocks declining last week, their is concern that both of the stocks may have short term valuation issues. Long-term, we continue to like Dell and IBM as long-term holdings. We define long term holdings as three to five years. We believe investors who average into any potential downturn will outperform the market as both of these stocks are key technology companies who will participate when the Europe and Asia economies strengthen. Investors who hold undiversified portfolios with large gains - should take some profits. Stay tuned and we will see if IBM finally buys a ring. The preceding report was first delivered to subscribers of The-Adviser.com Alert, a FREE investment newsletter published by The Independent Adviser Corporation, America's Fastest Growing Independent Financial Adviser.