How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 430.29

-0.7%

Jan 30 9:30 AM EST

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To: Exacctnt who wrote (59790)	7/13/2001 9:27:38 AM
From: Hawkmoon	Read Replies (4) of 74651

Just how did Put writing increase MSFT's current revenues and earnings? Exacctnt, I believe that it qualifies under SFAS 133 as a hedging activity. And they obtain a nifty tax deduction in exchange. But someone please feel free to correct me about SFAS 133. This is just what I've understood. Additionally, if I understand it correctly, because MSFT issues so many ISOs to its employees, the corporation effectively pays no corporate income tax. It's employees pay their tax obligation for them when they excercize their options. But there is a limit, imo, to the extent that MSFT can continue such an aggressive ISO program without eventually finding themselves going cash flow negative from having to repurchase their own stock. And unless they have some super success with XP/Win2000pro upgrades over the next year, I have a hard time understanding how they will maintain revenues from sales of product/services. Decreasing revenues, combined with increasing ISO liabilities is a scary prospect for this company. This is how these ISOs have been affecting DELL. I can only imagine that Mr. Softie will soon fall victim of its own devices. Especially if tech spending remains constrained, and/or there is a lack of ability to increase market penetration overseas, where Linux and BeOS seem to be finding increasing support. thestreet.com Hawk

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