Earlie from Earlie:
Tonight could be interesting. So far, most of the tech-related Q4 results have been mildly disappointing, especially with respect to guidance. This is putting a slightly dampened blanket atop the previously fiery desire to own tech paper.
After 4:00 pm., we will be enlightened as to how important tech heavyweights, IBM and MSFT, see our brave new world.
With respect to Microsoft, recall that the company instituted a nasty new licensing policy that became effective as summer waned. Effectively, that policy caused a ton of buying as folks rushed to beat the deadline. Having kept the old Earlie finger on this scene, it sure looks as though there was a decided "lag" in license purchases this past fall, which, in spite of Microsoft's oftimes miraculous accounting, might well show up as a disenchanting item this eve. We shall see.
With respect to IBM, I know of not a single division which has not been whacked this past quarter. And we also have a broadening bag of aging "service contracts", which will no doubt be providing very slim pickings to current quarters, given the "front-loaded" revenue generation they provided in their initial years. Then too, the company is just starting to grudgingly provide evidence of the impact of its seemingly never-ending borrowing binge of the last few years (to buy back all that valuable stock). Countering this is the fact that IBM is the undisputed king of the accounting scamarama, hence it would be more than imprudent to expect that the actual deterioration occurring in the company's business might just start bulging out from behind the curtain. Again, we will see.
Certainly, if one or both were to drop a "clanger" tonight, then tomorrow could be rough.
Best, Earlie |
