Rough price model of Microsoft from 96 to end of 1998:
1996 1997 1998 1999(predict)
Jan $21.5 $42 $63 (2.93) $139 ( 3.31)
March $25 $45 $87 (3.48) $ 156.6( based on 3.48)
June $31 $63 $110 (3.55) $ 223.5 (based on 3.55)
Sep $ 33 $67 $110 (3.33) $ 223 (based on 3.33)
Dec $41 $62 $139 (3.39) $ 210 (based on 3.39)
So what the above model show ?
1) The price of MSFT at a certain month of 1998 is always somewhere of 300%
to 350% of the same month of 1996. So, use these ratio, and the prices of
1997 as bases, we predict the price of 1999.
So, based on this model, Microsoft should hit $156 by march of 1999, and
$200 sometime between March and June of 1999.
Due to the big pull down on Oct of 1998 and DOJ case, Microsoft did not
seem to appreciate from June to Sep of 1998. We assume the big pull down did not happen in 1999, and the release of new products, we may see Microsoft
hit $250 to $400 if we see a big surprise in earning.
2) Historically , we see that Microsoft's stock price did not appreciate much in the June to Sep quarter, however, in 1996 and 1997, Microsoft still appreciate 6.5% in 1996, and 6.35% in 1997 from June to Sep. If we take the same ratio for Sep of 1999,
Microsoft should be $223.5 * 1.0635% = $237.7 at that time.
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