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Technology Stocks : INTC

INTC 40.03

-1.3%

Dec 1 3:59 PM EST

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To: Reginald Middleton who wrote (160)	4/10/1997 2:24:00 PM
From: Paul Engel	of 990

Reginald & Xstuckey - Re: Intel & Microsoft P/E Valuations One item which may relate to the difference in relative P/E valuations of these two companies is the relative number of shares in float, or available for trade. Intel's largest shareholder, Gordon Moore, controls approximately 5.4% of Intel shares. I think Andy Grove and other insiders might control another 1+%. Basically, this removes about 6.5% of the shares from the active trading pool (Assuming they hold their shares). Microsoft is quite a bit different. Bill Gates holds 23.7%, Paul Allen holds 9% and Steve Ballmer holds 5%. This comes to 37.7%. Assuming insiders hold another few percent (large option holders at Microsoft) and that they also do not trade, this amounts to about 40% of the available shares NOT AVAILABLE for trading. Perhaps this RELATIVE difference in shares available (Intel - 93.5%, Microsoft - 60%) results in fewer relative shares of Microsoft available for trade, pushing up the stock price, and therefore, Microsoft's P/E evaluation relative to Intel. Please note - the above data comes from 1996 published filings. Paul

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