Conference 7.286::digital

	Do de term "Armageddon" ring a bell ?


	Steve H

    The word being heard in Atlanta is a to be reported 500 million loss.
    
    of course this is just rumor....
    
    Ted
    

    Speculation on the income or loss of Digital to be reported publicly
    based on information that has not be disclosed to the public, is
    against Digital policy, and arguably a violation of securities laws of
    the United States.
    
    Speculation on the income or loss of Digital to be reported publicly
    based on information disclosed to the public and on the opinion of
    industry analysts, is discussed mostly in SUBWAY::DIGITAL_INVESTING.

    
    No rumor.  We told Wall Street not to expect a profit for 2 more
    quarters.  That means we have yet another loss after this next one!
    
    I'm gonna hold on to my stock for another 6 months at least.
    
    -Ed
    

    
     As for stock, you'd be foolish to sell at this point.  You've already
    taken the biggest losses and it's worth twice what Wall Street says it
    is.  Hang tight for the long-term.  The turn-around WILL come.
    
    

    re -1
    The book value is worth twice what Wall St. says but does this
    mean they don't believe in our Balance Sheet values of Inventories,
    for example, or that our strong Assets situation could be frittered away
    if DEC doesn't take some hard decisions quickly?
    
                                      Max  

    The stock will recover in direct proportion to how many bodies 
    they pile up.  They'll probably announce the results in 
    conjunction with shooting about 15,000 people.
    
    ...AND the generosity of the next severence package will
    be directly proportional to what the results are.
    
    Just my opinion,
    
    Mark

    
    re .6
    
     The current stock number reflects confidence (or lack thereof) that
    the company will turn around soon.  As has been stated, some folks see
    another quarterly loss yet before things get better.
    
    

    
    
    4th quarter results --->  GAME OVER!!

    re .6
    
    Digital has already made some hard decisions and will continue to make
    more of them.  Although many of us may argue that the pace of those
    decisions has been too slow they are nonetheless being made.   My
    feeling is that the company is doing everything reasonable and without
    panic do get back on track.  The "new Digital" will eventually come out
    of this stronger.
    
    My guess is that regardless of operating figures (profit or not) the
    company will report a loss based on another huge write off against
    further consolidation of operations through plant closings and layoffs.
    
    The interesting question is if the U.S. AREA makes its numbers and the
    corporation still reports a loss, will the U.S. AREA employees get
    their $250 bonus from Don Z?
    
    
    Marv
    

    
    
    re .0 
    
    already possessing shares I'd not dump it now, because Wall Street
    of course is expecting a big loss and that's already anticipated
    in the stock price. A big jump in either direction would occurr
    if the reported result was 'too far' from analysts predictions.
    As you don't know now, selling would be pretty much the same as 
    gambling. 
    
     

    DEC 35 5/8, change -0 5/8; DJIA 3290.70, change +5.08 at 11:00.
    Report entered at Wed Jun 24 11:20:42 1992.

    
    It's said DEC stock should be $100. by 1995.
    
    What we have to do today is ship everything we possible can ship
    without any slips or mis-ships.
    
    The more we can ship off-the-dock to capture as much revenue as
    possible will be goodness. We must manage the backlog and ship the most
    big dollar orders first.
    
    Come Q1 we must show improvment with OTD revenue from last Q1 as an
    indicator to Wall-Street that we are on the road to recovery.
    
    Come Q1 we must decide what business we're in and Re-Eng the Corp as
    well.
    
    Rick (just my opinion)
    
    

    Wall Street, Wall Street, Wall Street... 
    
    These people take their best guess on how much money a corportation's 
    going to make their clients in the short term and, somehow, we feel
    that a cororation's WORTH should be based on these whimsical, flippant,
    mostly irrational Wall Street babblings.  I can remember a time last year 
    when oil prices would have plummeted or soared based on a rumor that 
    Saddim Hussein was constipated... or not.  Why do we regard "Wall Street" 
    as the Oracle of corporate value knowlege?  Why don't WE figure out what 
    it takes to make the Corporation valuable and the HELL with the short 
    term, greedy visions and estimates of the inhabitants of the almighty 
    "Wall Street"?     
    
    If we do what pleases Wall Street, we'd cut all R&D, sell everything
    we've got, fire everyone and position the corporation for a short term,
    money making "burn out" all so that stock holders can make a quick buck.
    The "slash-n-burn" policy of corporate America as dictated by Wall
    Street.
    
    The Japanese aren't that stupid, that's why they continue to succeed in 
    both the short and the long run.  Wall Street dictating the value of a
    corporation is like the tail wagging the proverbial dog. And it's
    cannabalistic.  We'd better wake up, work hard today, and plan for 
    tomorrow.  
    
    (FWIW)
    
    
    -dave 
    

    RE: .14
    
    DEC exists to increase shareholder value.  Period.  It is the
    shareholders who have invested their money in us.  So, what "wall street"
    does and thinks is very relevant.  Also, the stock price is the 
    present value of the expected future earnings stream.  Since there are no 
    earnings on the horizon, the stock price is well below book value.  This
    is one of the reasons why book value is meaningless.
    

    re .10
    I work in the field and I would feel GUILTY about taking the $250
    "bonus" with all that is going on. We need to get through this together 
    or we won't make it.
    
    just my opinion
    Ron

    
    re .14
    
     Exactly.  What Wall Street DOESN'T know about computers and the
    computer industry would fill oceans.
    
    

    RE: .18
    
    You are missing the point.  Wall street (stockholders) trade DEC stock.  
    The stock price is based only on earnings.  They don't need to know
    anything about computers.  They want to see earnings.  Stockholders
    don't invest their money in DEC stock so they can learn more about
    computers, they do it with the hopes of making some money on stock
    price appreciation (DEC pays no dividends) as a result of high
    earnings.  We can babble all we want about the computer industry, but
    all the stockholders care about (and all they should care about)
    is earnings.  DEC's job is to increase shareholder (aka wall street) 
    wealth.
    
    

    <The stock price is based only on earnings.>
    
    I wish it were that straight forward.
    Oftentimes the stock price isn't even _primarily_ based on earnings.
    Oftentimes, the stock price is based on the ...
    
    stock price.
    That is to say 
    	if the price has been moving up the price will (more often than
        not) move up
        if the price has been moving down, the price will (more often than
        not) move down
        if the price hasn't been moving, more often than not the price won't
        move very much.
    				herb

Wall Street may not know much about the computer industry (or they might),
but they are attuned to stock prices which I thought the topic was about....

The trick, as always, is to buy low and sell high...   WHEN to do that is the
$64,000 question.

You (like Wall Street) have to decide what Digital's long and short term 
prospects are and plan your short and long term goals accordingly.

OF COURSE, my predictions were Dukakis over Bush, OS/2 over Windows, DEC at
60+, etc. etc. etc. so DON'T listen to me 8^)

		Bob

    
     The stock price is based on MANY things, some having nothing to do
    with the company or even the computer industry; the nation's overall
    economic health, for one.
    
     But the "bottom line" can be, and often is, blind to changes in an
    industry and adjustments a company may have to make for the sake of
    its fiscal future.  DEC, for example, is sensitive to what our
    customers' future technological needs will be and as a result we make
    adjustments that may incur immediate financial losses for the sake
    of fulfilling long-term business needs.  
    
     Wall Street is often, though not totally, blind to such developments
    and usually far too slow to respond to them.
    
     We cannot afford to be.
    
     

    i dont know much about wall street stuff , but why can t we pull out
    of it?
    yes, just tell them we dont want you to sell our stocks any more, 
    we go back and do business in peace without wall street on our
    back, and in few years we can just go back back.
    
    cant we do this?
    
    i know iam simplifing it, but iam sure it can be done if we want
    to?
    
    right?
    
    thank you ,
    /nasser

    This is the time to buy - DEC can't go much lower, and if the stock 
    rises to 55, even over two _years_, you'd average 25% per year!

   .15> DEC exists to increase shareholder value.  Period.  It is the
   .15> shareholders who have invested their money in us.


There are three groups of people who hold a stake in DEC, or any company.

	1. The Customers
	2. The Employees
	3. The Stockholders

The Customers hold the largest stake;  they reinvest month after month, year
after year.  The Employees are in second place;  their investment is time.
The Stockholders are in third place;  their investment is once only.

A company that keeps the ranking of its stakeholders clearly in its corporate
mind will wind up with the happiest Stockholders, Employees, and Customers.

	RE: .23 Yes the company can pull out of the market. All they have to
	do is buy up all the stock. I doubt we have *that* much cash so the
	company would have to borrow the money. This would leave us with some
	big debts to pay reducing the money we have to invest in products and
	the like. This is a simplified explaination.

			Alfred

    re. 17
    
    Ron,
    
    	If it would make you feel better I'll take the $250 off
    your hands or anyone else who might feel guilty.
    
    Drew
    

    
    >This is the time to buy - DEC can't go much lower...
    
    Where have I heard this before?  I was stupid enough not to sell
    at the beginning of the month.  I won't make that misake again!
    
    -Ed
    

    Re: .23

>    just tell them we don't want you to sell our stocks any more, 
>    we go back and do business in peace without wall street on our
>    back, and in few years we can just go back back.
>    cant we do this?

     Digital could do this...but only with the number of shares the
     corporation actually owns. Most of the shares are owned by entities
     outside of the corporation. (private individuals, pension funds, 
     money market funds, employees, little old ladies in Wichita...)
     These outside shares will continue to be bought and sold on the market,
     causing fluctuations in the value of everyone's shares.

     KO, the executive committee, the board of directors... none of these
     entities OWN the company. The stockholders OWN digital. KO, and
     members of these committees may happen to be among the thousands of
     stockholders, but the only thing they OWN are shares of stock.
     
     Hope this helps,
     Marc     
    

    >This is the time to buy - DEC can't go much lower...

Is this based on fact or wishful thinking?  (This isn't a challenge on my part,
just an honest question.)

As far as I can tell, the only absolute limit on how low any stock can go is
$0/share, and DEC isn't there, or even close to there.

Another major loss in confidence on the part of the shareholders could, and
probably would drive the stock price even lower, independently of any tangible
factors like book value or profitability.

Or, to put it another way (and in a logarithmic sense), things could always be
worse.

    
    This question may be irrelevant, but how much of Digital stock is owned
    by employees?
    
    Faith
    

  
    I think we all agree (at some level) that DEC, like any other
    corporation, exists to make the stockholders money.  I think the
    question that remains unanswered is what the corporation should do
    in response to that.  Should it...
    
    a) Do whatever the Wall Street / Stockholders say, regardless of the
       validity, shortsightedness or rationale behind these *suggestions*.
    
     or
    
    b) Do what's best for the stockholder and the corporation in spite of
       the less informed decisions being made outside. 
    
    
    
    Maybe an analogy would serve...
    
    An parent rushes her child into the emergency room for help. The 
    professionals enter and begin working on the child, but the child is
    screaming even louder as the tubes and needles are being shoved in.
    The parent is objecting loudly, claiming that the child was in less 
    discomfort before the treatment.  The nurse brings the parent to the side, 
    assuring him/her that the treatment is in the best interest of the
    child's long term health. The crying is even louder as the doctors
    examine the injury.  The parent is now hysterical and wants the
    treatment to stop.
    
    Who's the best informed on what's best for the child?
    What should be done?
    
    
    
    

    By December you will be happy you didn't sell.
    Anyone buying DEC stock today should be buying 
    for the long term.  When the price starts to
    level off again around 100 then short term
    buying may be more favorable.

    Cashing in after the buy to gain the 15%
    is usually the safest strategy but even
    that is no guarantee. 

    cbc

    
    I have heard that 5% of the stock is held by employees.
    
    

    The book value of the Corporation is not twice the current stock price.
    I don't have the exact figure, but it has been dropping for quite some
    time. With the anticipated Q4 results, it will drop even lower.
    
    Marshall
    

Ahhh Gi'day...�

    The book  value is relevant.  It's an indication of your net worth.  If
    the  stock price is below your net worth, then you are in a position to
    "raid"  the  company, by buying a controlling interest, and selling off
    all the assets to realise the assett value.

    
    
    re .32
    
    using that analogy you'r assuming management knows what to do
    ( 'the right thing').  However, history offers no such evidence
    (for example PC's, mainframes, RISC, Unix and so on )!
    
    							helmut

    The last book value was approx. $56 per share, reported in our Q3
    results, I believe.  With the market price of the stock at approx.
    65% of book value, can we expect a proportional drop in the market
    price if our book value per share goes down to about $45 after the
    Q4 results are reported?  Remember, we might be talking a $1.5B to
    $2B (yes billion) loss in Q4 IF we take the $750 million hit for the
    retirement benefits accounting practive, the $1B restructuring
    charge as allegedly hinted by DEC senior executives, and an operating
    loss of $200M - $500M as some folks are expecting.
    
    Just curious
    
    Mark
    

    As someone said in a previous note it's not just current earnings
    that effect the share price but also what investors think about 
    the values of our assets that contribute to the "book value".
    
    Supposing our inventories are valued cost less an obsolesecence
    reserve that is not considered adequate for a company in an industry
    subject to rapid technical change like ours is.
    
    The net value of inventories on our balance sheet could be 100 but
    if an industry analyst sees that our inventory turns has dropped
    significantly he could decide that they are "overvalued" compared
    to what they would realise if we had to liquidate them and estimate
    their value at say 75.
    
    If you do the same thing with the rest of the balance sheet you might
    arrive at an assets valuation of the shares out on the market which is
    much inferior to the theoretical book value.
    
    This is the reverse of the situation that raiders and asset strippers
    make their money on.
    
    They do an independent valuation of say a small family company that
    has, for example, land and buildings that have never been revalued
    and are now grossly understated in the balance sheet, work out a 
    "realisable value" of the assets that is much higher than the book
    value or what it will cost them to buy the shares then they raid the
    company, liquidate it and sell it off in bits and pieces.
     
    Personally I think that unless someone desperately needs the money
    they should hold onto their DEC shares because I am sure that DEC
    will turn the corner eventually and even if there was an attempt 
    to take it over this would drive the shares higher than they are
    at the moment.
    
    I've got no personal interest in hoping this as I got rid of mine
    a couple of years ago and tomorrow is my last day as a DEC employee
    in any case.
    
    Max
                  
    

    
    	FWIW...
    
    	I took several investment/personal finance courses 5-6yrs ago.  One
    of the basic themes that appeared throughout these courses (that made
    sense to ME, maybe not you...):  It's generally a bad idea from purely
    an investor's point of view to hold stock in the company you work for. 
    It is almost impossible to make a rational, informed decision about the
    stock because for the most part, you will always take the "sunny side". 
    I'm one of those folks that takes the %15 immediately and move it into
    something safer.

Let's see if I can pick up some of the threads from teh last 25 replies...

bonus: If you earned your bonus, take it.  It probably means that you 
      or your organization were doing your part ot get the compaby back
      in shape.

raiders/book value:  The book value is related to the book value, and little
      else.  The synergy among items is what determines the difference
      between book value and market value.  The company's patent portfolio
      might be worth far more or far less than its "book value" based
      on whether tooling is in polace, or more efficient tooling is developed,
      to take advantage of any item.

going private:  Possible, but expensive.  You have to buy back enough stock
      to get control, then find a way to get the rest of it too.
      SEC rules abound.  It can and has been done, but the reason companies
      go public in the first place is to get access to more money
      to run the company (or to reward the founders and backers).

wall street:  It's unfair to say that businesses exist just to make money.
      Some businesses are founded for that, others also reflect other goals
      of founders and backers.  Money is necessary, of course, but it's 
      not the only possible goal.  Going public, however, generally reduces
      you to the lowest common denominator, which is just the monetary factor.
      
      Investors can be identified in two roughly divided camps:  
      fundamentalists and technicians.  Fundamentalists look for business
      rationales and invest based on economic principles.
      Technicians look for correlations that need not be tied to the 
      fundamentals of a business.
      These are charicatures to some degree, but a fundamentalist is more
      likely to have a long term economic plan, and technician will
      take his money and run.  If a technician discovers a correlation 
      between his daughter's school grades and the price of a given
      stock or commodity, he'll play it first and figure it out later.

      There was a telling example of this on an episode of the PBS program
      "Enterprice" a few years ago.  Banks claim that they do international
      currency trading to facilitate international trade by making a market
      in which buyers and sellers from different countries can consumate
      trade in each other's currencies  (a very fundamentalist rationale).  
      However, the case studies in the program all demonstrated the technical
      manipulations (active and passive) that went into making a profit 
      in the currency trading business.  Doublespeak?  Hypocrisy?  Surprising?

- tom]

  RE businesses exist to make money 

  I heard an interesting story about 10 years ago about a conference between
the leaders of U.S. business and the leaders of Japanese business. Sorry I
don't remember the details of where or who. 

  Anyway, the story goes that the U.S. and Japanese businessmen met for several
days and discussed many aspects of the business world. In the end they emerged
and when questioned each said exactly the same thing. Both the U.S. and
Japanese businessmen, when speaking of the other group, said that they were
very intelligent and creative about the small things but were wrong about what
was most important. 

  The U.S. businessmen said that the Japanese businessmen didn't realize that
they were in business to make money, not to provide products and services. If
they would just concentrate on making money, the products and services would
follow.

  The Japanese businessmen said that the U.S. businessmen didn't realize that
they were in business to provide products and services, not to make money. If
they would just concentrate on making products and services the money would
follow.

  George

    
    -.1.....bingo!...they've got it, by George, they got it!  Unfortunately
    it's the Japanese who have got the right idea.  Sorry if this is a 
    rathole but, I regularly watch two programs on the Discovery channel,
    Beyond Tomorrow and Beyond 2000 both produced by an Australian
    firm so the emphasis might possibly be slanted.  Each program
    hightlights new services, products, applications, etc and it is telling
    that most of ideas are from either Japan or the EC countries.  Further,
    most of these ideas start with discovering and fulfilling customers'     
    needs.  The idea is, build the product, create the service and the
    money will come.
    
    Rathole alert....over!  

    
    
    That's it! Some time ago I' ve read a scientific investigation
    that drew the conclusion that companies setting moneymaking 
    as their primary goal ended up at best amongst the midfield
    players in any given term!
    
    So, for instance, William H. Gates III, for sure is not in
    for moneymaking, otherwise he'd never got his $7.000.000.000
    stake in Microsoft.
    							helmut

    re .43/.44 - Does this sound familiar,  or outdated:
    
    "Growth is not our primary goal.  Our goal is to be a quality
    organization and do a quality job which means we will be proud of our
    product and our work for years to come.  As we achieve quality, we
    achieve growth."
    
    
    Source:
    Section 4.0:  Digital Philosophy. 
    Engineer's Orientation Manual (EB-ENGRS-OM-002) January, 1980

    re: .45
    
    I know there are people in this company who still believe that.  I am
    one of them.  However, I think the "quality" goal gets traded off
    against other goals more easily that I like.
        John Sauter

	It is also part of section 1.03 of the current P & P.

				Tom_K