Conference 7.286::digital

If that's the reason for the stock rise, my only concern would be that the
rumor stays alive until my sell order (requested yesterday PM) is executed.

    This is getting very interesting... When AT&T bought NCR it paid 3
    times  book value, I'm told.
    
    Assuming ours is around 27$, a reasonable offer should be at $70.-
    (taking into account our upcoming large donwsizing).
    
    Patrick

    I wonder if it's actually a bid for the German subsidiary(s)?

    I'm not sure, but I think there are about 19 Mio Shares out, which
    means a price of 121$/Share if you divide 2300 Mio$ by 19 Mio Shares -
    or did I something wrong in my calculation ??
    
    Still to cheap??
    
    Hubert

    ....but that wouldn't be worth $2.3 bn... rather like $1, if you are
    generous

    Shearson recommended us a buy late monday.  This is the reason our
    shares have gone up.  If anyone made an offer for the company, our
    shares would be up much more.  $2.3 B is just about book value (~100M
    Shares * ~$20/share book value as of end Q4).
    
    Jack

    Amount of outstanding shares is $125M.
    
    Out of which I own... (still too much).
    
    Patrick

    re: .0
    
    Just checked Reuters wire for last two (2) days, nothing to this 
    effect, scanned for our stock/Siemens.
    
    Maryanne Cuff (one of the NY team for Reuters)

   On NBR last night, they reported that Hughes Corp. has selected ALPHA
   as their platform.....



_sbn 

SInce I received several phone calls regarding this. This information - I'd
rather say rumor - was given to me by a personal friend. 
Since I couldn't believe it I posted it here to verify (thanks go to the person
who checked Reuters) and (most likely) to forget it as fast as possible and go
on with our daily business. 

Thomas

    At least Bob Palmer didn't mention anything in the Employee Forum DVN
    which just finished...

Yesterday's rise due probably to buy recommendations (2 in the last week or so),
and the $20M in 2 years ALPHA sell to Hughes.  I've heard nothing about Sieman's
takeover.

Is there good news about Q1 creeping out, too?

    I just read a news report on Prodigy that noted a single block of stock
    representing 426,300 shares sold before 10 AM and total trading of
    3,841,800 shares compared to an average of 900,000 shares traded daily.
    
    This was at 1PM today, 9/21/94.

    just checked again.. it's at 4,030,100 shares at 1:30PM...
    

Perhaps profit-taking?

    I think a stock's price would normally drop due to sales for profit
    taking.  Our stock price seems to be locked in at 28 1/2 today perhaps
    due to a large buy order at that price.  Just guessing, though...
    

    If this was a large buy order (~10 million shares in two days) I
    believe there would have to be an SEC filing re: > 5% ownership.
    
    Dave

    I had heard through a friend in Marketing that an investor or group of
    investors had stated that we would have an outstanding CYQ1 (FYQ3) and
    that this was much of the reason for the increase.
    
    ..Larry

    think you got your fy and CY backwards

    As of September 12, 1994, 142,777,178 shares of the registrant's Common
    Stock, par value $1, were issued and outstanding.  The aggregate market 
    value of the registrant's voting stock held by non-affiliates of the 
    registrant as of September 12, 1994 was approximately $3.4 billion.
    
    taken out of the 10-K report 

>    As of September 12, 1994, 142,777,178 shares of the registrant's Common
>    Stock, par value $1, were issued and outstanding.  

Since this number is pretty stable....the market value of Digital Equipment
at a price of $29/share is now right around $4.14 billion.

A couple months ago, at $19/share, we were worth around $2.7 billion.

Did the true value of the company really change that much in 2 months!?

Just goes to show you how unstable investors can be.

Siemens taking over Digital??

Ha, joke, not so long ago Siemens bought a company called Nixdorf,
they're still suffering from that.

In Germany, the rumours go that AT&T and/or Rank Xerox have bought Digital
stock. It seems that every time that our stock goes up there are rumours
that we will be bought. In the old days if a Japanese tourist was lost
in Maynard the rumour came that one of the big Japanese companies was
buying us. No offense to the Japanse is meant in anyway.

What about all the preffered stock outstanding, what would anybody gain
by buying a lot of "normal" stock.

Ciao,

Michiel

RE >Did the true value of the company really change that much in 2 months!?

This is the true value of the company. Same goes for your car. It is only
worth what people will pay for it.

    "value" means different things in to different people.
    
    Digital's book value hasn't changed over the last two months. It's
    still around $20 (from the FY94 results). Our stock traded at a
    discount to book value two months ago, now it's at a premium.
    
    Market value has increased by more than 50% from it's lows two
    months ago. Seems that some smart guys got burnt with short-selling
    our stock and speculation now turns to the idea of a successful turnaround 
    of the company.
    
    And then there's the strategic value, that Digital might have for
    some other company. Putting a number on this is a wide area for
    speculation.
    
    Klaus 

RE: 3400.24 by UTROP1::HOEFSMIT_M "Old sins cast long shadows"

> What about all the preffered stock outstanding, what would anybody gain
> by buying a lot of "normal" stock.

Ownership.  Common (or "normal") stock has voting rights,  and no limit to
possible gains/losses.  Digital preferred stock has no voting rights.  
Digital preferred stock is a promise to pay fixed amounts at fixed times.  


Phil

re: .21 by PNTAGN::WARRENFELTZR, "think you got your fy and CY
backwards"

No, Q1 of the calendar year (CY) starts January, as does Digital's Q3
of the fiscal year (FY).

Pete

    reg .26 
    
    137,090,000 was average outstanding # of shares at 30-JUN-1994 wheras 
    142,777,178 was the figure at 12-SEP-1994 - so its not as stable a
    figure... over a relative short period 
    
    but we are diverging from the topic....
    
    The only fear I have on a hypothetical Siemens buyout, is that, then two
    companies with a 'proven' record in 'successful' mergers merge....
    What an outlook ;-)    

    I doubt that someone's prediction on business for Jan-Mar 1995 would
    have much impact on the stock price. 
    
    But an outstanding Q1FY95 (Jul-Sep 1994 , which is Q3CY94) would be 
    real news to the markets. And we are within four weeks from earnings
    announcement for Q1FY95, so there might be a couple of people with an 
    idea about where we are heading.
    
    Klaus

    Folks, the reason the stock is going up is because there have been
    several strong buy recommendations from financial analysts.  Digital
    has demonstrated a significant, or significant enough, revenue stream
    for Alpha AXP based products, combined with the company's restructuring, 
    that leads them to believe the turn around is at hand.
    
    The price of a stock, or the price you are willing to pay, is/should be
    directly related to your best estimate of how much you will earn (ROI
    and various other measures of profitability based on capital gains
    and/or dividends) from purchasing the stock.

    Not so,,, my best friend works there. There in just as bad if not worse
    shape than digital. They have outsourced their material and repairs for
    their money making machines. Every night we share the whats knew who's
    going first, just get it over conversations. Their end of year is this
    month, they don't even cut the lawn anymore. We at least still do that.
    
    So no couldn't happen..... 

re: "I doubt that someone's prediction on business for Jan-Mar 1995
would have much impact on the stock price."

    Although I do agree that the "strong buy" recommendation made by Cowen
    has helped the stock, I doubt that the > 50% runup in the Stock
    price since july can be attributed mainly to better analyst expectations.
    
    I think that most of the 50% rise is caused by short-covering and
    speculative/technical buying. Those short-term buyers will take their 
    profits as quickly as they have bought into Digital stock. And until we 
    show sustainable revenue growth and a profit it's to early for the
    crowd of long term investors to jump in.
    
    If I'm right, then the stock should show a decline on profit taking
    over the next weeks, probably to the $25 range. If it doesn't do
    that, I'd expect either some surprisingly positive fiscal news in the
    pipeline or take those takeover rumours a little bit more serious.
    
    Klaus

>    Although I do agree that the "strong buy" recommendation made by Cowen
>    has helped the stock, I doubt that the > 50% runup in the Stock
>    price since july can be attributed mainly to better analyst expectations.

Yesterday's Boston Globe had an article about our mysterious stock price
appreciation.  There is no specific reason for optimism, according to 
the article, but the investors (speculators?) are now more comfortable
buying because the stability of the last few months has demonstrated
a price "floor" around $19.  This is seen as a potential limit to the
downside, because all the "skittish" investors have bailed out already.
There are few enough possible "panic sellers" left that the new 
(or returning) buyers are moderately assured that modest bad news
will not cause the stock price to fall too far, too fast.

Bottom line:  this is a technical, not a fundamental, rally.
(But one that I hope can be sustained at least until early December.)

- tom]

I'd be careful at basing any opinions on what the Globe says.  The Globe has
a history of finding the most negative possible way to portray Digital.
I was astonished that Wednesday's paper had an item on the stock price that
didn't include the word "troubled", but they must have realized they slipped
as it was back on Thursday.

					Steve

re Note 3400.37 by QUARK::LIONEL:

> I'd be careful at basing any opinions on what the Globe says.  The Globe has
> a history of finding the most negative possible way to portray Digital.
> I was astonished that Wednesday's paper had an item on the stock price that
> didn't include the word "troubled", but they must have realized they slipped
> as it was back on Thursday.
  
        I've always been puzzled at the amount of Globe-bashing at
        Digital.

        Digital *is* troubled and we have been troubled for a good
        number of years and to the tune of billions of dollars.  It's
        a true characterization until we prove it to be otherwise.

        Additionally, Digital has been making serious tactical and
        strategic mistakes for over a decade, long before the red ink
        caught up with us.

        While I have seen errors of detail in the Globe, I haven't
        seen many errors of tone or gross misrepresentation.

        The Globe is not a propaganda arm of Digital PR!  If we want
        good press, if we want a good public image, we have to work
        at it.  It won't just be handed to us by the press.

        Bob

    gee Bob, I thought that the Globe sold papers.  What's amazin' to me is
    that Digital employees, their families and friends, will buy the paper
    to read what it says about Digital.  They're just printing what the
    customer wants.
    
    At least this conference is free.

	re: last few

	and you'd probably all be amazed if you knew how much of the Globe's
	operations depend on Digital technology (hint: lots)....

	not that the editorial staff really cares about that ;-)

	_kelley (former Boston presales covering the Globe amongst others)

    
    we are down 2 already today.

    Friday profit-taking...

re: siemens take over rumor

This sounds very credible to me.  Siemens is a 80 bill
DM (about $50B) company with 21Bill DM inthe bank
(about $12B).  They do own nixdorf which does about
12Bill DM in sales (about $8Bill) and about ZERO
(ok so they do $5Mill) in the US.  Source: Siemens annual
report. 

So suppose they have to pay $5bill for us, including
restructurng charges($28/share + $1Bill in 
restructuring).  They clearly
could do it in a stock deal or even pay cash for
some or all of it.  What do they get that they would
value?

	* $6Bill in sales in the US
	* A couple of state of the art semi factories
  	  that they would like to have for their semi
	  business (2Bill DMs worth) + competent people.
          Probably worth $1B
	* A tax loss carry forward.  That is worth at
	  least $1Bill to them. 
	* $1B +/- in cash and another 
 	* $3B in recievables 
	* A modern computer technology in Alpha 
	* A revenue stream on sale of services and
	  vax add ons 

So that says that they get $6Bill in tangibles for
a $5Bill cost.  Plus all the intangibles for "free". 

What does DEC get?
	* A financially strong parent to diffuse the 
	  will DEC be around objection in sales 
	  situations
	* Cash to run the business? 

  
The nice thing about rumors is that they are like 
standards -- so many to choose from.  This is one of the
few that make lots of sense. 


re: stock decline today:

two things happened:


Paine Webber Computer Analyst Stephen Smith
downgraded its rating of Digital Equipment Corp. 
to ''neutral'' from ''buy,'

AND

CS First Boston cited Digital Equipment Corp
for being slow in making structural changes, market 
sources said.
The analyst, Curt Rohrman, said most of
Digital's sales force transition had yet to occur, 
according to sources. Rorhman also said employee
reductions were a bit behind schedule.