How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 478.53

-1.0%

Dec 12 9:30 AM EST

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To: John Malloy who wrote (35215)	12/9/1999 12:51:00 PM
From: ericneu	of 74651

The second key forecast is the price/book ratio investors will pay for Microsoft. They currently pay an extremely high P/B of 15, well above P/B ratios of 2 to 3 typical of mature firms. As growth slows, investors will lower the P/B ratio they are willing to pay. You also need to forecast how the P/B ratio will fall. --- What meaning does price-to-book have for a software company? What makes Microsoft valuable is a) the software and b) the skills and knowledge of the employees. - Eric

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