Microsoft off on antitrust fears-analysts
SEATTLE, May 7 (Reuters) - Microsoft Corp. stock slumped Thursday on
increasing concern that federal regulators plan to file a broad
antitrust suit against the software giant, industry analysts said.
Microsoft was off 2-9/16 at 83-13/16 in heavy Nasdaq trading after
Business Week became the latest media outlet to report that the U.S.
Justice Department plans to bring suit by next month under the federal
Sherman Act.
The stock has fallen in 10 of the past 11 sessions since it peaked at
a record 99-1/8 last month.
''Complacency is being displaced by concern,'' said David Readerman of
NationsBanc Montgomery Securities.
If the Justice Department files an antitrust suit, there would be ''a
very swift selloff in Microsoft,'' he predicted.
International Business Machines Corp. (IBM - news) stock rose only 7
percent in the 13 years it was fighting a federal antitrust suit, he
noted in a research report.
He also said investors were concerned about a possible injunction
against the sale of the Windows 98 operating system update, which is
scheduled to go on sale June 25.
But Readerman and other analysts noted that despite heavy publicity in
recent days Windows 98 actually is a relatively minor product for
Microsoft. Readerman estimated Windows 98 would bring in less than
$600 million in additional revenue over its first year, about half the
impact of its predecessor Windows 95 three years ago.
The story in the May 18 issue of Business Week, which goes on sale
Friday, says the Justice Department plans to launch a broad antitrust
case against Microsoft. Business Week also reported that the Federal
Trade Commission (FTC) may take action against Microsoft's partner
Intel Corp (INTC - news) as well.
The Justice Department's antitrust case will charge that Microsoft
illegally uses its monopoly power in computer operating systems to
expand its share of other markets, the magazine said.
Business Week also said attorneys general from several states are
planning a coordinated action against Microsoft that could come as
early as next week, as has been widely reported.
On Intel, Business Week said FTC staff members are planning to present
a proposed action charging the chip maker with illegally using
monopoly power to harm its rivals and punish customers who cross it.
''It's a non-public investigation. We are continuing to work with
them, to meet with them, the spirit of cooperation in still in
place,'' a spokesman for Santa Clara, Calif.-based Intel told Reuters.
The FTC is also investigating whether Intel unlawfully uses its chip
dominance to fight its way into new markets, a move that could result
in a separate action, Business Week reports.
The report, citing sources familiar with the FTC's investigation, said
the agency initially is focusing on charges that Intel retaliated
against two customers that sued the company in patent disputes. The
two companies are Digital Equipment Corp (DEC - news) and Intergraph
Corp (INGR - news). |
