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

To: gnuman who wrote (53957)	3/30/1999 2:25:00 PM
From: Earlie	Read Replies (1) \| Respond to of 132070

Gene: I've also heard a few rumours along those lines, although I personally can't see it. While I despise CPQ's top execs. as bald-faced liars, I don't consider them dumb. AMD is struggling financially, so as you note, the company could be had for (over-priced) stock. AS CPQ has cash, this would ease AMD's worries about the costs involved in a protracted micro price war, which is just getting warmed up. While many think AMD is struggling technically, I think otherwise. They have a superb development team on board, so I see the current difficulties in production as the kind of bumps one should expect, given the company's staggering ramp up. Certainly, there would likely be no difficulties in the AMD camp. The box builders need AMD alive and healthy. They have long memories. They will be loath to return to the days when Intel had them over a barrel. So long as the products emanating from AMD are technically competitive and priced appropriately (in comparison with Intel), the industry will happily buy AMD's products. It might become "interesting" if CPQ was the owner. (g) CPQ would be burning some bridges if it acquired AMD. It already has access (ownership) to the Alpha chip (64 bit), and it is spending sums on its development. (It is known that some Intel personnel are squirming over this issue.) But is it intelligent to spend big development bucks on micro development when the market is saying it doesn't really need all that much added performance? Dumber things have occurred, but it makes more sense to just enjoy the benefits of ultra cheap and excellent chips produced at someone else's bottom line cost, particularly given the fierce competitive environment. An AMD acquisition might also make a mockery of CPQ's supposed move towards a greater reliance on the "service" side of the game. It will be fun to see if there is any truth to this one. (g) Best, Earlie

To: gnuman who wrote (53957)	3/30/1999 3:40:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 132070

Gene - I was a CPQ shareholder last year, and was lucky enough to sell earlier this year at 48. I was afraid of what occurred last February (1998) when the stock tanked due to channel problems. In either case, we did have some discussion of AMD on the thread a couple months back. I think it would be foolish for CPQ management to do it. In addition to what Earlie mentioned, CPQ is still in the process of digesting DEC. They just bought a couple E-Commerce firms. They also bought Tandem. Management has to struggle with assimilating these pieces, while fighting off Dell. Throw in sharply lower PC prices and AMD's requirements for capital, and it makes a rather unappealing brew. Also keep in mind that CPQ is now trading at late summer '97 levels. The stock in my opinion would tank further on an AMD purchase, and Pfeiffer/Mason would probably end up looking for new work. (They may anyway <ggg>). It just doesn't make much sense.... Regards, John