I am a little surprised by the volume and largely emotional response on this group regarding Judge Jackson's findings of fact in the Microsoft case. So you know, I am long on MSFT since 1/22/99 with a basis of $78.13 and believe that the company and stock will do well for many years regardless of the out-come of the current litigation.
The legal issues involved in the trial were defined by statutes passed by Congress and prior decisions of other courts - including the Supreme Court. Judge Jackson had no role in determining the law that applies to the MSFT
anti-trust case. He has conducted a trial where all parties were presented with the opportunity to offer evidence relevant to the issues of law.
IMHO, MSFT's loss on the findings of fact were a forgone conclusion. The DOJ (and the states) did a very good job but they had a lot of help from MSFT's internal e-mails and other actions which MSFT had taken with regard to Netscape, IBM, etc. On the other hand, MSFT's attorneys at times looked confused and scattered in their approach. Several of MSFT's own witnesses admitted to critical elements of the government's case. The trial was little short of a disaster for MSFT for the simple reason that the facts were weighed heavily on the government's side. Judge Jackson must still apply the facts (as found in his Friday order) to the law and make conclusions of law. Then he must determine what an appropriate remedy would be. IMHO, MSFT has an opportunity to mitigate the impact of the findings of fact in these steps toward Judge Jackson issuing a final order and appealable order.
Whatever, the outcome in district court, I am very confident that MSFT will be a long-term (and successful) portion of my portfolio. Even if the Supreme Court were to uphold a decision to break Microsoft up into separate corporations, that result may not be a disaster for MSFT shareholders. In 1911 Rockefeller's Standard Oil lost its anti-trust case in the Supreme Court. According to Ron Chernow's "Titan - The Life of John D. Rockefeller, Sr.," the break-up of Standard Oil into 34 separate components was the luckiest stroke of Rockefeller's career. In 1911 Rockefeller's estimated net worth was $300 million - based on his 25% ownership of Standard Oil. When Standard Oil was broken up, Rockefeller received 25% of the stock of Standard Oil of New Jersey and 33 other companies. By the end of 1913, Rockefeller's stocks in the 34 companies were worth $900 million. In the ten years following the Supreme Court decision, the assets of its constituent companies quintupled in value, "Titan", pp. 556-557.
I invested in MSFT because I believed in MSFT's leadership. MSFT is a significant player in all areas of emerging computer/telecommunications technology. Even if MSFT is broken up into its constituent parts, I don't believe what happens inside of a courtroom can significantly affect a MSFT stockholder's prospects if they are long.
I will hold and look for MSFT's management to resolve the the litigation on relatively favorable terms as quickly as possible. |
