Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Invest / LTD -- Ignore unavailable to you. Want to Upgrade?

To: drsvelte who wrote (8245)	4/18/1999 7:04:00 PM
From: sand wedge	Read Replies (2) \| Respond to of 14427

We may see some strength in the tech sector tomorrow, CPQ admits the earnings shortfall is a company specific problem not the entire sector. INTERVIEW- Acting execs said Compaq moved too slow biz.yahoo.com

To: drsvelte who wrote (8245)	4/18/1999 7:58:00 PM
From: sand wedge	Read Replies (1) \| Respond to of 14427

More news on CPQ. Compaq's Pfeiffer, Mason Resign; Rosen in Charge (Update1) Bloomberg News April 18, 1999, 3:07 p.m. PT Compaq's Pfeiffer, Mason Resign; Rosen in Charge (Update1) (Adds analyst comment, comment from Rosen beginning in the 5th paragraph to the end of the story.) Houston, April 18 (Bloomberg) -- Compaq Computer Corp. Chief Executive Eckhard Pfeiffer was forced out as board Chairman Benjamin Rosen assumed control at the troubled No. 1 personal computer maker. Chief Financial Officer Earl Mason also resigned. Rosen, along with board directors and Vice Chairmen Frank Doyle and Robert Enloe will run the chief executive's office until a replacement is found. Ben Wells, Compaq's treasurer, will become the acting CFO, the company said in a press release posted on its Web site. Pfeiffer was forced out after a series of missteps including a profit shortfall in the first quarter, failing to articulate a clear strategy for besting rival Dell Computer Corp. and concerns about selective disclosure. The Houston-based company's shares have fallen 24 percent in the past week. ''Someone had to take the fall,'' said analyst Ashok Kumar of U.S. Bancorp Piper Jaffrey, who rates the stock ''buy.'' ''You have to give kudos to the board for acting decisively and in such a short time frame.'' Down This Road Before Rosen, who is one of the initial investors in Compaq, has been down this road before. In 1991, he forced founder Rod Canion to resign after the company missed earnings forecasts. Pfeiffer took over in October of that year. (Rosen)''Compaq has changed -- it is no longer a PC company,'' Rosen said in an interview. ''It's a different kind of company and sometimes that calls for changes in leadership.'' Rosen said he met with Pfeiffer yesterday and told him the board felt he should resign. Mason resigned voluntarily to take a position as CEO of a company in an unrelated industry. Pfeiffer, who joined Compaq in 1983 as head of international operations, had been widely criticized in the past several weeks for not disclosing the earnings shortfall earlier and also for blaming industry conditions. Other PC-related companies haven't seen the same magnitude of a shortfall and analysts and investors had said the problems at Compaq were unique. Compaq had first alluded to slowing demand that could hamper profits in late February when it told analyst Michael Kwatinetz of Credit Suisse First Boston Inc. and a group of investors that demand from some corporate customers had been slower than expected in January. Several of the company's top executives, including Mason, sold $50 million worth of Compaq's stock before the meeting with Kwatinetz. Two class action lawsuits have been filed against the company. Compaq has struggled to come up with an effective strategy for selling computers direct to end users, as Dell does, and that has crippled it with a higher cost structure than competitors. The company started selling direct last November, but has waffled with the strategy by expanding it to including retailers and resellers earlier this year. ''We're going to focus on better execution and accelerated business decisions,'' Rosen said. ''The main thing we have to do is make better use of our assets, skills and technology.'' Heidrick & Struggles Chairman Gerry Roche will lead the search for a new CEO, Rosen said.