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Technology Stocks : How high will Microsoft fly?
MSFT 478.52-2.8%Dec 10 3:59 PM EST

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To: rudedog who wrote (40856)4/3/2000 9:20:00 PM
From: Hal Rubel  Read Replies (2) of 74651
 
PE

RE: "Guess what - MSFT still has the software the world runs on, and that won't change any time soon."

This is true. The judge even alluded to this in finding that Microsoft had monopoly powers in the market place.

However, I think the real problem here is the PE ratio. Even if the revenue and profit progression remains stable, there is now a ceiling to Microsoft investor's expectations that was not there before.

I think that some investors and institutions will require additional profits from Microsoft just to maintain current prce levels. In other words, some of the PE premium will evaporate and future pricing will be effected.

Hal
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