Thursday, August 17, 2006

DELL's Enron time

I predicted that DELL will go down like Enron unless it goes AMD by the end of 2Q06. Now, it's 3Q06, DELL is not shipping AMD yet. There are reports saying DELL bought two million AMD CPUs, but you have to wait a few more days until September 2006 for the back to school season. DELL is very slow in saving its own life. This AMD move would mean DELL's Enron time may be slightly delayed. However, there is a 75% probability that an Enron scenario can't be avoided.

Look at Dell's results, shareholder equity is now only $3.1 billion, and the market cap is still $52 billion. A price/book of 17. Folks, this is a house of cards, it can crash to the ground any moment. The fair price of DELL stock should be less than $3, at a level close to Gateway's.

I told Michael Dell that he needed to act quick to save his company. I warned him that once a company like DELL crashes, Feds will knock on doors trying to find scapegoats to send to jail. Had Enron survived, Jeff Skilling would be enjoying his half billion. But Enron crashed, and Skilling is in jail. SEC is now probing DELL. You can bet when DELL crashes, a penny of mismatch in books will be evidence of criminal activity.... You sign the paper submitted to SEC with materially untrue stuff? That's securities fraud..


Anonymous Anonymous said...

I will give you credit. You are right on the money with this post. Dell made a lot of people wealthy but even the most die hard loyal pro dell analysts will cut Dell ratings if it posts bad results in the next quarter.

Intel is betting on Apple's cool factor and favouring it over Dell. Dell has no place to run but to AMD.

2:28 PM, August 17, 2006  
Blogger Sharikou, Ph. D said...

Dell has no place to run but to AMD.

I correctly predicted that Intel would have to introduce a uniform pricing scheme which would neutralize Dell's pricing advantage. Dell acted too slow. It should have made the first move. As I pointed out, if Dell made the first move, Intel would not be able to eliminate the rebates, because that would be evidence of Intel's monoplistic behaviour. But Dell dudes were so stupid, they waited till Intel made the move of eliminating discounts...see my previous analysis.

2:57 PM, August 17, 2006  
Anonymous Anonymous said...


3:19 PM, August 17, 2006  
Anonymous Anonymous said...


I am suprised you have not floated away, the ego you have is overwhelming...

Can't seem to get enough of yourself can you?

6:40 PM, August 17, 2006  
Anonymous Anonymous said...

Another failed analysis by an unemployed and non-achieving PhD prettender... who says
"Dell has no place to run but to AMD."

What a silly premise that Dells slow down in consumers is driven by INTEL inside. Like that silly green logo will get people to rush out and buy a cheap ugly, slow, amd driven computer from a company with a service support issue and a huge stain in their pants with this batter recall. Sorry Joe best Buy can saunter down to Best Buy or other retailer and get a equal or even cheaper laptop, desktop. Sorry Dell+AMD doesn't make Dell fly. Nor did staying with INTEL only make Dell the next ENron.

ANy person who makes the analogy between a company that was outright manipulating the market and hiding financial shannigans vs a company who's business model has matured and run the natural course is no PhD but a jack off.

10:39 PM, August 17, 2006  
Anonymous Anonymous said...

Price to Book is different. It is the ratio of price/(equity+reserves). u just seem to have taken it as price to equity.

1:05 AM, August 18, 2006  
Anonymous Anonymous said...

Its a plauseable senario, but I think that Dell has gained an under dog persona with its fall from grace because of the laptop battery recall.
The adoption of Amd cpus will give Dell a great volume trouble free line and this will vault Dell to a greater position as dominant product supplier in the consumer area and big player in servers because of its aggressive pricing mantra. I predict Dell will be top dog 2007-2008 in servers-notebooks and desktops all thanks to AMD.

1:16 AM, August 18, 2006  
Anonymous jsf said...

"Dell dudes were so stupid, they waited till Intel made the move of eliminating discounts"

The thing is that most corporations tend to be conservative with their suppliers. They had to be completely sure that the Intel to AMD switch was crucial before making it. They couldn't stand the Apple deal and the new pricing scheme. Now, looking back, switching a year earlier or so makes a lot of sense, but if this things (I mean the new pricing and the heart-breaking deal with apple) hadn't happened, Dell could still remain price-competitive.

3:09 PM, August 18, 2006  

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