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

To: Jimbo Cobb who wrote (58773)	4/19/1999 5:19:00 PM
From: rupert1	Read Replies (5) \| Respond to of 97611

CNBC did a 5 minute piece on COMPAQ a half hour ago. The usual round up of yuppie analysts. The filmed piece basically said that COMPAQ is getting hit at the high end, the low end and in the middle. It never mentioned the backside. There is a damaging theme developing in the media. Basically, it is that the next six months is a write-off due to (a) slowness in the industry and (b) the search for a CEO. With respect to (a) the analysts seem to feel freer to admit that there is an industry wide slowdown, now that EP has gone. But I think they have the emphasis wrong. 2Q and 3Q are quite strong, seasonally, and there are some stimulii floating about to perk up demand. With respect to (b) I do not expect that Rosen is going to put everything on ice while a new CEO is found and then give him a month or two to look around with carte blanche to bring in his own vision. Rosen will start executing the current vison. There may be a lot of detailed work to be done on channel reform, but I think he can go ahead with AV and with integrating DEC and redeploying the services division. He can also sharpen the focus and the PR. Rosen will want to make money in 2Q 3Q and 4Q - he said as much. I think he will make strategic decisions - for example AV - and the new CEO will have to live with the strategy as he finds it, although he will be able to amend it and revamp it over time. The only reason I can see for taking 3 months to find and appoint a CEO is if the new person needs time to free himself from commitments. There is no reason why they could not find someone next week - I'm sure the new man has already made up his mind that he wants the job, if offered, and if conditons are right. If COMPAQ can stay within hailing distance of its plan I can see it getting back over $30 just before or after 2Q earnings. The 2nd half of the year will draw it forward, the appointment of the CEO and the spin-off of AV will help move it higher. I still think it can exceed $55 by Christmas.