How high will Microsoft fly? Message Board

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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: Triffin who wrote (1664)	6/18/1997 8:15:00 PM
From: Craig Schilling	of 74651

James I'm not a bear on this stock but it is unfortunate that people don't understand why the price of MSFT stays in an uprising stable line even at these levels. It's called options magic, an accounting loop hole and some smart money management by Greg Maffei the treasurer. If you read the current issue of Fortune (July 7th) you'll see why the stock continues to rise and what will cause it's correction in the future. It also gave me a clear understanding why MSFT issued the $980 million in convertible perferred stock. The problem is no body knows when this game will end and MSFT stops buying the stock back to cover the immense number of options it pays out, now you know why they keep $9 billion in cash around. To make a long story short the company is able to overstate it's profits by 26% because options don't count on the income statement. If you read this years annual report you'll see this for the first time, only you have to look in the footnotes under options expense to find it. Accounting standards board has tried to change this but lobby by industry yells at congress any time this is brought up. If your an investor in this stock it is a must read article. I'll probably get a lot of grief for this post but at least, if you read the article, you'll have a better understanding of this amazing stable price rise over the years and its potential demise. Craig

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