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

To: Elwood P. Dowd who wrote (57103)	4/12/1999 5:45:00 AM
From: rupert1	Read Replies (1) \| Respond to of 97611

Elwood: EP said things last night which are important. He has partially filled the void left by the Mason announcement. His claims will affect the eventual price of the shares today and during the week as the market comes to grips with his statements and pursues them at Innovate. Many in the market are resisting what he says (i) because of his crediblity problems and (b) because they don't want to believe that some of the COMPAQ shortfall was due to general market conditions. They have a vested interest. They want to get out of other tech stocks before they fall, not after. They want to believe Michael Dell and disbelieve EP (and who would blame them). But EP is under the microscope right now and his words have to be taken into consideration. He has said that MD was essentially engaged in propaganda, that DELL has also been hurt by market conditions and time will show this. Of more concern to us he said (a) that costs are continuing to be cut and the previously announced cost-cutting program is on track (b) that the DEC merger is on track but taking time, as all such mergers do (c) he said that the shortfall in sales was 5% and should not be blown out of proportion. (d) he said that COMPAQ maintained market share, albeit at the cost of selling low and losing profit (e) he said that going forward they continued to expect strong growth (f) he also said that part of the problem is the ever-increasing expectations for growth on competitors and COMPAQ alike which causes all companies (and I think he was having a dig at DELL) to fight so hard for market share that they bring down the price of products and hurt profits for everybody. It amazes me that as we insignificant shareholders were speculating on what COMPAQ might or might not say today, yesterday evening, EP was on the phone again. The day has to come when shareholders get the same information as the analysts and the press at the same time.

To: Elwood P. Dowd who wrote (57103)	4/12/1999 5:48:00 AM
From: rupert1	Respond to of 97611

Mainly old news, but notice the legal action by a Trust. The Register Posted 11/04/99 8:15am by Mike Magee Barrage of legal actions hit Compaq Shareholders and others do not seem particularly happy with Compaq's performance and are taking legal action against the hardware giant. In the last two weeks, a total of six actions have been filed against Compaq. The latest set includes the Virgo Family Trust versus Compaq (securities action), and Robert Honmhyr (class action). Both of these actions cite Compaq, as well as CEO Eckhard Pfeiffer and CFO Earl Mason. The four actions filed against Compaq prior to these include actions from Steven Kammerman (class action), Gary Gilman (class action), Faith Hesselgesser (employment litigation against Tandem and Compaq), and Joseph Cotroneo (class action). This will keep the lawyers happy. Follow that paramedic.

To: Elwood P. Dowd who wrote (57103)	4/12/1999 5:50:00 AM
From: rupert1	Respond to of 97611

Don't be stampeded by the headline. Growth in Europe predicted to be good, but lower. The Register 12/04/99 10:10am by Graham Lea MS warns of thinner times in European PC market Michel Lacombe, President of Microsoft EMEA, is sounding a cautionary note about PC sales in Europe later this year because of the Y2K issue and the slowness of SMEs to renew equipment (Microsoft's preferred solution because of additional Windows' sales of course). Lacombe sees European PC growth being in the 10-15 per cent range, and is keeping to this downward-revised forecast from January. Lacombe broke ranks by suggesting that Microsoft's last reported quarter (a 38 per cent increase in revenue) might have resulted from additional Y2K spending, which could now dry up. This does not auger well for Microsoft's revenue this calendar year beating last year: perhaps the buffers are in sight? British market researcher Context lowered its forecast to 17 to 20 per cent at the end of January from 20 to 22 per cent. However, in data supplied for the European Information Technology Observatory, IDC predicts that the EU market will grow only by 9.8 per cent from 1998 to 1999. IDC believes that the Western European hardware sector will decline from 5.9 per cent to 5.5 per cent of the IT market vale growth, with software increasing from 12.1 to 12.8 per cent, and services also up around 0.6 per cent. ®

To: Elwood P. Dowd who wrote (57103)	4/12/1999 6:11:00 AM
From: rupert1	Read Replies (1) \| Respond to of 97611

El: I read somewhere, that DELL had troubles with re-sellers similar to COMPAQ's when it was converting from indirect to direct, and that during the height of the transition it nearly went under. DELL is having to go back to mixed channel again, to some degree, especially outside the US. I think the adjustments are difficult - for COMPAQ to direct and for DELL to more mixed - and I think there has been an effective boycott of COMPAQ products by some re-sellers this last quarter as a revenge measure. The white boxes - not DELL - has benefitted. Re-sellers were happier in the last two weeks of March after they got their extra percentage points from COMPAQ, but this probably creamed off that profit that COMPAQ needed to make up some of the earlier shortfall. However, if the resellers continue to be happy it should maintain market share and recover some of the lost sales even if profit will continue to be a struggle. Re-sellers will also have to learn that COMPAQ cannot go on spoon-feeding them, COMPAQ has to cut its costs. Personally, I still don't buy the Kumar analysis that it is all company specific. So he was more right about the earnings shortfall, but still 20-25% wrong. But his luck at throwing a dart wearing a blindfold doesn't make him a prophhet. If you had followed Kumar in the last quarter, even on COMPAQ - let alone some of his other stocks - you would be in a heavily losing position. A few weeks ago, he had COMPAQ as a buy when it was in the $40's and saw the downside at $35. He still had it as a BUY after he predicted earnings of 20 and thought that all his gloom amd doom still justified $30+ as a buying price, despite his talk of "dead money" at $24 on Friday evening.