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

To: D. Swiss who wrote (125478)	5/17/1999 1:44:00 PM
From: Mark Peterson CPA	Read Replies (3) \| Respond to of 176387

Hey Drew, this is probably old news, but two blocks of 1,000 May 50 options traded at 3/16 at 10:36 and 10:38. The implied volatility was about 69 and the theoretical value was less than 2 cents. IMO, the specialist wasn't buying at that disparity between fair market value and theoretical value. So who would want to burn money at the rate of $18,750 per thousand lot? What gives? Mark A. Peterson

To: D. Swiss who wrote (125478)	5/17/1999 2:24:00 PM
From: Meathead	Respond to of 176387

D, I don't have a clue as to Gigabuys cost or profit structure. Acting as a middleman it may be close to pure profit but the margins would be very slim. Right now, Gigabuys is a positioning tactic used as a value add service to their customers which creates more incentive to do business with Dell. I believe it will grow to become much more in the future however. Taking a wild guess at 1.5% net profit, Dell would need to pull 1.66B in sales thru Gigabuys this quarter to add 1 penny to earnings. That's a lot of commerce! However, I'm sure their cost structure is close to nothing so the ROIC will be substantial. My guess is that it will only add a few million in net profit to the bottom line this quarter. The IBM deal which reduces/eliminates royalties should have a much greater impact than Gigabuys this quarter. Maybe someone else on the thread has a better understanding of Gigabuys profitability picture???? Also, a question for Chuzz. How will Gigabuys commerce related revenue activities be reported on the balance sheet? If Dell moves 200MM worth of Kodak cameras thru GigaBuys this quarter, would the 200MM show up in top line revenue? I would think it wouldn't and would somehow be reported differently.... Anyone? MEATHEAD