I've come around to the two is better than none since I posted that. Maybe the three way was just a red herring to soften up Mr. Softee.
It will be interesting to see what, if anything they do with IE. I gather from the WSJ article that they won't dump it into a separate company, but Boies' comments in the oral argument transcript seem to suggest that they might open source it, something he seemed to think was a fairly minor alteration of the final judgment.
Meanwhile on the stock front stockholders are getting pretty restless. That down 4 today to a new low was on only 45 million shares. Once the final judgement is in and the Appeals process is started (straight option to the Supreme Court is Joel Klein's choice) the pressure will really be on a lot of holders and we're still in the middle of a Nasdaq melt down.
It's pretty hard to separate out cause and effect on the stock price. I'm sure MS would love to be able to say that it was all because of the antitrust case, that the government destroyed $200 billion in wealth by doing what they're doing, etc. Unfortunately, it's not so simple or clear as that. After all, MS missed its quarter, and, as you say, the NASDAQ has been in melt-down mode for some time.
Sherlund certainly thinks the stock is worth less if the company is broken up. While he's not someone whose opinion you can just blow off, it seems to me that most of his concerns are short to medium term, whereas the government says medium to long term, shareholder value should increase with the breakup.
My own view is that, whatever the merits of a breakup as a business proposition, the antitrust case does not provide adequate support for that kind of remedy. I think the government and the judge are really going out on a limb here, and they're going to get reversed, at least as to remedy, if not on liability. Then it will come back down for a new remedy hearing to come up with some conduct remedies, which, if they stick, are not, in my view, going to increase shareholder value at all.
Microsoft might be pushing things a bit by claiming a due process argument, I don't know. But this judge has shown a pattern of bias, from the little extrajudicial demonstration of the uninstall during the Consent Decree case, to how he handled the trial, to, now, remedies. Plus, it seems to me that the need for a complete hearing process derives not just from the need to be fair, but also from the need to make sure the remedy is well thought out, based on an adequate record, and the like. There needs to be some proof based on something other than speculation that the remedy is actually going to work.
In any event, it seems to me that the judge has just handed Microsoft one or two issues that will get them at least a remand, regardless of whether the claims rise to a constitutional deprivation.
That, of course, just adds further delay, which plays into Microsoft's hands.
Just some random thoughts at 1 a.m. |
