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To: Elwood P. Dowd who wrote (62098)	5/26/1999 1:36:00 PM
From: rupert1	Read Replies (2) \| Respond to of 97611

El: Yes there are stirrings in the graveyard. The next big announcement should be in little more than two weeks time. These appointments allow them to complete the draft of an important part of the Prospectus to be submitted to the SEC in the not too distant future.

To: Elwood P. Dowd who wrote (62098)	5/26/1999 7:45:00 PM
From: rupert1	Read Replies (1) \| Respond to of 97611

El: With regard to the COMPAQ earnings table provided by DRRISK and set out below, let us assume that it represents the worst case scenario. For the sake of compromise let us assume that FY 99 will be $1.50. By December, 1999 using a trailing p/e of 25 the share price would be $37 1/2, which is closer to your target than mine. However, as you know the market looks forward at least six months if not twelve. Traditionally it looks forward postively in December of each year. This year there will be a new CEO, an AV spin-off, efficiencies coming through re-organisation, progressively smaller inventory, possibly a sales bump from YK2000 compliance business and greatly expanded revenues and profits from services and storage and high-end hardware. Analysts at that time will be citing forward p/e relative to Y2000 earnings. If we use the same p/e of 25 and posit that Y2000 will be $2.50 then the appropriate price will be $75 in Decemebr, 1999. My target of $55 is conservative and allows for a lower p/e or a lower Y2000 earnings. (I think 1999 will be higher than $1.50). It is probable, in my view, that Y2000 will be closer to $3.00 and while the forward p/e may fluctuate between 17 and 30 at any given moment, I think that it is highly likely that in December1999 it will spike towards the higher end of the range. So a p/e of 28 on assumed Y2000 earnings of $3.00 would give a share price of $84 in Decemebr 1999 bringing it very close to Michael's target of $99 in 99. This is not to make you splutter out your cocoa - just a demonstration of why it is impossible for me to be cruel enough to accept your wager. For it to be a genuine wager, there must be genuine risk of my being wrong. Consensus EPS Trend Qtr(6/99) Qtr(9/99) FY(12/99) FY(12/00) Current Estimate $0.25 $0.32 $1.18 $1.78 7 days ago $0.25 $0.32 $1.18 $1.78 30 days ago $0.26 $0.32 $1.21 $1.81 60 days ago $0.39 $0.45 $1.74 $2.26 90 days ago $0.40 $0.45 $1.81 $1.78 Zacks Industry: COMP-MICRO Zacks data updated daily.