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Technology Stocks : How high will Microsoft fly?
MSFT 473.99+0.4%Nov 24 3:59 PM EST
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To: werefrog who wrote (50582)10/4/2000 4:16:14 PM
From: Bill Fischofer  Read Replies (3) of 74651
 
Re: Stock price

No, MSFT is not down because business is bad. As johnd has ceaselessly pointed out here, MSFT's business fundamentals have never been better. The stock is down because perceptions about MSFT's future are down. You cannot drive multiple expansion by looking backwards. A policy of abandoning the upgrade market is exactly the sort of forward-looking thinking needed to change that perception.

Do folks upgrade the OS in their cellphones? Their digital cameras? We are entering the age of internet "appliances". The PC is a disposable commodity and the quicker it becomes a "sealed box" the quicker the industry will be able to move to the next level. Pulling and replacing the OS on your PC has got to become as unthinkable as pulling and replacing the engine on your car. It is a mark of the maturity of the business. The golden age of the automobile didn't begin until you no longer had to be a mechanic to own one. The same is true of the PC.

In many ways MSFT's X-box initiative points the way to the PC's next evolution: smaller, simpler, cheaper, and sealed. This is the sort of change that drives perceptions. Change perceptions and the multiple will expand almost as if by magic.
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