Conference 7.286::digital

re: .0
    
>    Is this off the wall or what?

Yes.

Stock is used as an investment. If you invest when the share price is high
(relatively) and the share price drops and remains low, your investment is
lost. Those of holding shares purchased at $40 or $70 or $100 or more don't
feel particularly bright about them now being worth less than $30.

-Jack

    A consideration other than personally owning shares is that the
    company has to raise money from time to time. Selling stock is one
    option that is less viable when the price is low. The other option,
    borrowing money, tends to be more expensive. Even more so if a company
    is not doing well.

    			Alfred

Seems to me the company is raising money by making us
redundant.

For me, the share price being this low, kind of implies
Wall St. aren't happy with our management. Now if the
share holders are able to oust the board, will it happen?

Stuart

    
    i'd be shocked if a move to takeover Digital didn't occur during the
    next few months. Since the stock is currently trading at approximately
    2/3 of its book value (33.73) it would seem enticing perhaps for
    someone to crawl into position to tender an offer. Couple that with the
    likelyhood that Q4 is going to be a disaster (that's  what folks are
    saying anyway) and as a result the stock could fall to somewhere
    between the 10 and 15 dollar per share range, a move to takeover
    Digital would seem guaranteed. And I thought I was smart holding onto 
    my shares since my average price per share was a mere 28 dollars! 
    Sigh... I didn't learn my lesson when I held Wang at just over 20
    dollars each. Oh well, in any event, a rebellion of the shareholders
    looks pretty realistic at this point in time. I wonder whom would
    survive such a rebellion? 

    Re .4
    
       If 1/10 of the employees who are bashing this corporation in this
    notes file would make an effort to improve something, Q4 might NOT be a 
    disaster.
    
       It's easier to bash Marketing, for lacking marketing skills... NOT
    as easy to make positive suggestions for improvements, ---> BASH!
    
       It's easier to bash 'management' for lack of management skills...
    than it is to make positive suggestions for improvement, ---> BASH!
    
       It's always easier to take a Monday Morning aproach to coaching,
    and bitch and moan all day long....so...
    
       I, for one, applaud all the Digital Employees who are still in the
    game, working for resolution of some localizes faults, and willing to
    assist in getting us out of the dumps!
    
       ** Undboubtedly, I'll get BASHED for this attitude, so go ahead, 
          if it's the easiest way for you to vent those frustrations.
    
            there, now don't you feel better?
    
Regard
    
    Cy

Those who access this conference are always up for a good BASH, but lately I've
seen many good suggestions for improving Digital here.

Paul

    re .4
    The idiotic shareholders of this company let the Board ram thru a
    poison pill a few years ago that essentially dilutes the stock
    by 100% by issuing a share for every outstanding share.  Hence
    any takeover would be paying 2x, or roughly $40/share, or more than
    book value.  Had this provision not been adopted, DEC would likely
    be viewed as a more attractive takeover candidate, and the stock
    price probably would have been propped up closer to book value by
    speculation of a takeover.  The board wanted the poison pill for
    the simple reason that they're out of a job (and nice pay for doing
    very little) in the event of a takeover.  Alas, shareholders of this
    company (of which I am not) don't necessarily think before voting.\
    kb  

    
>       If 1/10 of the employees who are bashing this corporation in this
>    notes file would make an effort to improve something, Q4 might NOT be a 
>    disaster.
>       I, for one, applaud all the Digital Employees who are still in the
>    game, working for resolution of some localizes faults, and willing to
>    assist in getting us out of the dumps!
    
    You assume that the people in group one are not also in group two.
    Not a reasonable assumption IMHO.
    
    			Alfred

re: Poison pill, it's a simple thing for somebody interested in a take-over
to solicit the internal share-holders to waive the poison pill in favor of
getting some better (read: any, if any) return  on their investment. Also
there's the legality question about whether or not the poison pill really
means much besides sounding wicked on paper.

    RE:  .4
    
    	That may be true IF our book value actually was 33.73.  Sorry to
    say, but in finance there is more than one way to value a company and
    it's stock.  Depending on the method of choice, our book value can
    range between less than zero and the 33.73.  Now, naturally we'll
    select the method that looks best when reporting.
    
    	But, if your someone looking to buy this company you would most
    likely select a method that is more of an acid test....the triple net
    method for one example.  
    
    Step one.  get a balance sheet.
    
    Now, look at the assets and liabilities and put them to the test...are
    they really what they say they are and more importantly...are they what
    they say they are for your future purposes???
    
    For example:
    
    Cash 	A good deal of our cash is tied up in foreign countries. 
    		This money, from profits generated in those foreign
    		countries, may not be allowed out of the foreign country or
    		allowed out in small percentages.  Many countries have laws
     		restricting the taking of profits out of their country. 
    		They prefer you to reinvest and not create a country to
    		country debt position (smart on their part!).
    
    Inventories If company "X" buys Digital, they may not intend to produce
    		the same set of products or same type.  Thus, in their eyes
    		what we state as the value of our inventories is actually
    		may have a great deal less value based on their needs. 
    		This goes for everything from raw material to finished
    		goods.  Thus value it for what you will receive in the
    		scrap and reclamation market...pennies to the dollar.
    
    Property	Much of this is valued at what would have been received in
    		years past with time to sell it.  Not what the market would
    		pay today and not what the market would pay today in a
    		quick sale.
    
    Prepaid 	Write these off to zero.  Will these companies actually
    Expenses    give you the money back???  Maybe or maybe not.
    
    Liabilities Count on everyone from the IRS (first in line...ALWAYS!)
    		to the paper clip salesperson (not a slam on anyone selling
    		paper clips!  I have a friend that sells office supplies
    		and he has been making six figures for a long time now. 
    		And time, he has plenty to play golf and tell me about
    		it!), --anyway-- count on everyone to be in line to
    		collect.
    
    
    	So, when you go through all that, keeping your needs in mind as to
    how you plan to use this company in the future and why you're buying
    it, you will come up with a value that is what you would pay for a
    company, thus what it's worth to you or what the market is willing to 
    pay.  
    
    	And remember, what the market is willing to pay IS what Digital,
    your house, your car, etc. is valued.
    
    Bottom line, we will all make out a GREAT deal better if we work
    together to turn this ship around!!! 

    Re .5
    
    	You won't get much of an argument from me. We all own a piece of
    what's wrong with Digital. However, it's going to take nothing short of a
    revolution in how we approach our work habits/styles for things to
    change. I could provide countless examples of how we squander money and
    erode profit margins by engaging in helter skelter business practices.
    For example, we still seem to be modeling our approach to selling / en-
    gaging the customer as if we were selling aircraft. We still engage in the
     process of sending large teams of people out to qualify business let alone
    close it regardless of its size. Much of the time the profit margin is 
    erased before we even close the business in many of the smaller
    opportunities (that's if we get it).
    All of us need to question our involvment in this process to ensure
    that we are first, adding value and second, do we really need to all
    jump in a plane and enagage the customer or could this be done a bit
    more simply and cost effectively? We seem to be engaged in a process of
    bringing in money without considering the cost (which is understandable
    considering the pressure we're under to bring in revenue). 
    
    Anyway, I'm sure we all could go on and on about what's wrong with
    Digital. That's easy to do. Trouble is we all seem to know what's wrong
    but what is lacking is a willingness to take risks and attempt to fix
    what we see that is wrong. We all need to take responsiblity, from the
    top to the bottom. We can't wait for the other person to do it. It has
    to start somewhere and it might as well start with each and everyone of
    us. Go for it. What's the worst that could happen? You might lose your
    job? Seems like that has been what has been happening right along.
    
    

re:                      <<< Note 3005.7 by MSBCS::BROWN_L >>>

You must be one helluva chess player. There's no way my weary brain could have
predicted the conspiracy you portend back when the question was put/tucked
to us.

-Jack

    FOUR DIGITAL VICE PRESIDENTS SOLD SHARES BEFORE DISCLOSURE OF LOSSES

    Stock Exchange data indicated that the four Digital vice-presidents who
    unloaded stock during the company's unexpectedly weak third quarter
    sold on average 52% of their holdings. Richard Farrahar sold 22% on
    January 25th, Ilene Jacobs sold 68% on February 11th, Enrico Pesatori
    sold 20% of his share on March 22th and Lawrence Cabrinety sold all his
    503 shares on March 23rd. Laura Conigliaro, an analyst with Prudential
    Securities commented "It really just underscores the problems. I think
    management can turn the company around, but the question is, what will
    constitute success? The first step is finding stability, finding ground
    zero, and then seeing the company grow predictably."

    Wall Street Journal/Europe, London. 20th April 1994

smacks of "insider trading"...I'd of sold mine too had I known...

dave

    RE: .14 The sales were 1 to 3 months before quarter results were
    announced. There is no way, especially for the early ones, that 
    these people could have known. Suspected perhaps but not known.
    
    		Alfred

    
    >>   -< Commitment of VP's ??????????? >-
    
    I'm sure someone could create rather a funny joke if they used that as
    a punch line.
    
    Ian.

>    RE: .14 The sales were 1 to 3 months before quarter results were
>    announced. There is no way, especially for the early ones, that 
>    these people could have known. Suspected perhaps but not known.
    
    That's 3 weeks before for two of them. Suspected? Forecast?
    Predicted? Hum...I wonder why our predictability seems to
    be so bad these days? 

    Insider trading or not, I'm sure things like this do wonders for
    morale.
    
    Charles

    
    	I have to tell you that my morale level changed dramatically when I
    read this "VP" news in LiveWire and it didn't improve!
    
    	To have VPs in a company selling their stock in the company is
    almost guaranteed to set morale to a lower level in their employees!
    
    	I think that it should be mandatory for any VP or even senior
    managers to invest in the stock of their "own" company, the amount
    should be in some way related to their pay + benefits too - say 10% and
    two years to do it, from taking the job - 2.5% more each six months. 
    Not only that, but the stock should be purchased at the same rates as
    the bulk of the employees, and no selling them for x years either.
    After all, it would be a very strange Board of any company where the
    board members didn't own stock in that company!
    
    	That might enjoin a little more commitment of VPs and the senior
    management.  We'd certainly stand a better chance of ever making it to
    the Dividend List as KO promised when we pull through!
    
    				Malcolm. No smileys either.

    
    Stock is at 19 7/8, down 1 1/4 as of today.
    
    

    Re: .13
    
    Either way, the SEC should look into it.

    Someone back there mentioned that Q4 will be a disaster.
    
    Why so? I would imagine that due to the fact that we couldn't ship all
    what we wanted last quarter, and that demand usually doesn't taper off t
    hat rapidly, and that Q4 is usually a strong quarter, and that 
    everyone is under pressure to generate revenue, Q4 would be the best
    quarter we have had this fiscal year! 
    
    I am tempted to buy DEC stock at this price!
    
    - Rajesh

RE:                  <<< Note 3005.21 by TERSE::FANTOZZI >>>
      
>>    Stock is at 19 7/8, down 1 1/4 as of today.
  
     Does anyone recall the specifics of Digital's "poison pill" defense?

                                    Greg

    
    re.23
    
    Not with the dates my system orders are getting. It's the same old
    problem. Too many of our products are not available due to vendor
    delays and optional equipment is pushing out the dates. Besides,
    our cost of mfg things is too high.
    
    In a nutshell, the same things that are happening with orders is
    still happening. But I have never seen morale this blown away and
    it may make things that much worse.
    
    
    
    

RE: >>Does anyone recall the specifics of Digital's "poison pill" defense?

     I found it.  Topic 980.

                                      Greg

    
    I'm expecting another cosmetic Q4 profit like last year.  Smiles,
    high-fives, and congratulations from everyone at the top.  Pompous
    statements about a turnaround followed by raises and bonuses,
    again - at the top.
    
    

    re .23 you must be crazy
    If I sum up the replies to this note,apart from the people who bought
    high or bought always when the stock was rising,it must now be pretty
    clear to everyone that the stock could go to 2$ and it would make no
    difference.There is no bottom because we have spent the money and we
    owe the investors in common stock absolutely zilch-no dividends or
    anything.
    It simply boils down to how much we pay for our future borrowing and I
    would argue that we could actually borrow and probably should borrow
    around 5 billion dollars to get the show on the road.We could doit if
    we were viable and would not be too badly leveraged in comparison with
    some companies.
    So,don't keep dreaming about book value-as someone pointed out-it all
    depends.I once worked for a company with a book value of 11-at least
    that is wahtthey said when the stock was 9.When the stock was
    1/4(!),they said the book value was 9...
    The only case for buying shares massively is to dilute the average
    price of your holding but it is very risky if we aren't even near the
    bottom yet.I predict 5 by year end but as I said-it makes no
    difference.

    Assuming that we have 157 VP's and they all have a few shares at least,
    than the news is that 153 VP's held on to their shares. 
    
    Quite encouraging I would say.
    
    Al
    

re .29:

Most VPs aren't officers.  I don't think non-officers are considered insiders.

    re: .23 and .27
    
       I tend to agree with .23 and .27 that Q4 will show a 'paper' profit.
    
    
    						hang in there gang,
    
    									Bob
    

    
    Q4 rvenues ?
    
    
    Canada has made a record Q3 revenue compared to the last two years.
    It also looks bright for Q4 and Q1. Revenues grew by 13%.
    
    Stick in there !
    
    I'm also a shareholder.
    
    
    Rick

    Can the majority stockholder resume as CEO if he purchases a certain %
    of all DEC stock?

    
>    Can the majority stockholder resume as CEO if he purchases a certain %
>    of all DEC stock?

    A majority stockholder can pretty much appoint who ever he/she wants
    as CEO. I don't believe we've had one of those since the investment
    company that once owned 70% of the company split its shares off and
    sold them though. BTW, our last CEO only owns something like 3% of the 
    stock.

    			Alfred

    How low can the stock go before we're purchased and broken up?
    
    chg

re Note 3005.30 by NOTIME::SACKS:

> I don't think non-officers are considered insiders.
  
        I think you have the two concepts confused.

        It pains me to see the amount of speculation and accusation going
        on here.
        
        First of all,  if  you  know  something  about how the company is
        doing that isn't publicly known, then you are an insider.
        
        Secondly, officers of a  company  can only sell stock within very
        specific time windows, I believe  because  of  an assumption that
        they are insiders.
        
        None of us know the circumstances  under  which  any  of the four
        sold stock.  If I had any stock  worth  anything  I would have to
        sell it to pay college tuitions for two kids.  I don't!
        
        So could we have some constructive discussion, please?
        
        Anker

    
    sure...stock is at 18 3/8, whereas everything else was up.
    
    

    
    Today's volume well over $4M shares with a close at 19 1/4.  
    
    

DEC 18 3/4, change -1; DJIA 3652.54, change +53.83 at 16:11.
Report entered at Thu Apr 21 21:37:37 1994.

    
    Stock closed yesterday at 19 1/4, IBM on the other hand went up 6 1/8
    due to their earning .64 cents a share or 364 million. That's their
    2nd straight quarter in the black, mostly due to shedding 10,000 people
    when they sold their Federal Systems group for 1.5 billion. They also
    cut 3,500 jobs with 28,000 more to go by the end of their fiscal year.
    
    Sure hope we can turn around soon and report consecutive quaterly
    profits, and maybe our stock will go up to!! I see us bottoming out at
    15 1/2 or 15. 
    
    Where is that AT&T rumour when we need it?
    
    Mark

    you've not heard the microsoft rumour then!