How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 478.46

-1.7%

3:59 PM EST

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To: John F. Dowd who wrote (4303)	12/16/1997 1:18:00 PM
From: Bearded One	Read Replies (1) of 74651

There's really a better discussion group for Microsoft vs. Netscape already, and I don't want to type twice. Let me move the discussion back to Microsoft's share price for a second. I do not think Microsoft is going to miss its earnings. I am bearish on Microsoft for 4 reasons: 1) PE and PS is normal for a growing startup, not for a market cap of 170 billion. The implied future earnings for it's PE is somewhere around 10 billion a year. I don't see where that's coming from. 1a) They are predicting growth of 20% or so for the next several years. That's more evidence for #1 above. 1b) Even if they do take over other markets, those markets such as cable and on-line services are right now extremely low margin. It's a lot easier to pump out an extra million copies of Microsoft Word than an extra million on-line accounts. 2) Regardless of the merits of the case, I believe that the market has seriously underestimated the power of the US government. More to the point, I am almost speechless (almost!) at the stupidity of Microsoft's forward defense strategy and arrogance towards the government ("To Heck with Janet Reno"!!!!!). And no, they won't be able to move to India. 2a) I think the judge will not distinguish between Windows 95 and 98. 3) Windows NT 5 is supposedly 30 million lines of code. I have a book by Microsoft Press that shows the optimal time schedule for programs of various sizes. 500 thousand lines is the largest it covers, and that takes 29 to 42 months. Even if they started NT 5 five years ago, there's no way it's not going to take them another three or four years to get it working. I'm not going to go into other details here, but ask any professional programmer how long it should take to get a 30 million line systems program to work. 4) Asian Flu. I am bearded, and I do not wear a bow tie.

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