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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 665.67

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To: Fun-da-Mental#1 who wrote (26283)	9/19/1999 10:56:00 AM
From: Benkea	Read Replies (1) of 99985

OT - MSFT divies. I think most know that MSFT NEEDS to keep large amounts of cash on hand to cover the huge number of puts it is naked to lower the cost of the NECESSARY share buyback (of ridiculously priced stock) to partially off-set the HUGE dilutive affect of the 892 mil options outstanding with an average strike of $11 15/16. How profitable is MSFT? You first need to subtract 892 mil X $11.94 ($10.7 BIL) in off income statement expenses. That $10.7 bil is equal to the entire after tax net income for the last three years! I think it is safe to say that at $1/2 a trillion, MSFT is priced very reasonably considering it is UNPROFITABLE after options for the last three years. On last thing, adding the 900 mil shares into the market cap (which SHOULD BE DONE), MSFT is really closer to $600 bil in market cap. Head over to the "South Sea" and get your "tulips".

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