Ray,
Thanks for your insights on the DOJ issue, which is undoubtedly considerably more complex than either of our initial synopses. Hopefully, by initially expressing polarizing views, we’ll encourage some debate and bring to bear some of the considerable intellect lurking on these pages, to determine just how large a piece of the mosaic is DOJ vs MSFT. Let’s hope that we can do more than just scratch the surface.
Your initial point, that the MSFT crash coincided with the crash of the NASDAQ, certainly deserves more attention than to write it off as a mere coincidence. Looking back, you’ll notice that the MSFT slide actually preceded the NASDAQ crash by a couple of months. In fact, MSFT price began to stagnate after judge Jackson’s 6/7/00 order to
split MSFT into 2 companies (O.S. and applications). In 10/00 MSFT trounced earnings estimates by .05, followed by an increase in stock price from the 80’s to a peak of approx. 118 in early 12/00. Then in the first week of 12/00 Sherlund cut estimates, in the second week of 12/00 MSFT warned, and thus began the slide of MSFT in the third week of 12/00. Meanwhile the final dot com frenzy took the NASDAQ from around 2800 in 10/00 to it’s 5000 peak in early 3/01. A brief bounce in MSFT, from 91 to 111, provided some transitory support for the NASDAQ, but in late 3/01 the crash began in unison. If you peruse charts of MSFT vs the NASDAQ, you’ll see that MSFT has since
miserably under-performed the NASDAQ.
This raises a number of questions, all of which we’ll need to address, but to proceed in an orderly fashion let’s make it a point to take on one question at a time. The first point I would like to explore in this discussion is: Given the history of MSFT’s leadership position in the NASDAQ, to what extent do you think the approximately 60% drop in MSFT contributed to the drop in the NASDAQ? |
