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

To: E. Davies who wrote (129963)	5/31/1999 5:08:00 AM
From: puborectalis	Read Replies (4) \| Respond to of 176387

GREAT NEWS.....Dell Computer Is 'Quite Pleased' With Second Quarter Sales, Executive Says By Biddy Chan Hong Kong, May 31 (Bloomberg) -- Dell Computer Corp., the world's biggest direct-seller of personal computers, is ''quite pleased'' with its sales so far in its second quarter ending July 31, said a top executive in an interview. The company recently reported its second straight quarter of slowing sales growth. Sales for the fiscal first quarter ended April 30 rose 41 percent, less than the year-ago quarter's increase of 51 percent and slower than the average 54 percent growth Dell had in the previous eight quarters. So far in the second quarter, ''we are all quite pleased,'' said Chief Financial Officer Thomas Meredith. He declined to provide specific figures. Dell expects to increase sales in Asia, particularly China, the fastest-growing computer market in the region, he said. In August, the company opened PC production facilities in the southeastern Chinese city of Xiamen. Dell now ranks 10th in China by market share. Sales from Dell's China operation more than doubled quarter- on-quarter in the three months to March, after more than tripling in the last quarter of 1998. ''Our Chinese operation is actually the fastest-growing affiliate in the company's history,'' Meredith said. ''We are increasing our investment in China, and I would expect that to continue for the foreseeable future.'' Sales in China, Japan and the rest of the Asia-Pacific region, which accounted for 7 percent of the company's sales in the quarter to April, will rise to at least one-third of the total ''over the course of the next several years,'' he said.

To: E. Davies who wrote (129963)	5/31/1999 11:44:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Eric, I think you are making a few mistakes in your analysis. First, stock buybacks are dividends -- not investments. I have previously published the financial mathematics demonstrating this on this thread, so I won't repeat it here. Outside of the tax-advantaged nature of the buyback there is no difference between Dell dividending the cash to shareholders and having them purchase additional shares with the cash. Second, the buybacks are not cash generating activities -- they use cash. I think you are confusing the sale of put options with the buyback. Although it is appealing to connect the two by assuming that selling puts finances the buyback, they are, in reality, quite distinct. Dell investing in Dell really boils down to putting money into plant and equipment (and buying an existing company also falls into that category). Anything else is not an investment. And if Dell chooses to acquire another company that is in fact investing in Dell, because what it really says is that management sees greater growth opportunity by purchasing a business (which will yield returns in excess of its WACC) than the repurchase of stock. TTFN, CTC