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Technology Stocks : How high will Microsoft fly?
MSFT 485.49+1.8%Nov 26 3:59 PM EST
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To: Srini who wrote (19642)4/4/1999 9:46:00 AM
From: PMS Witch  Read Replies (2) of 74651
 
Just curious about the stuff at the bottom of your post.

If I understand correctly, the claim has been made that AOL stock will appreciate to the point that the market cap of AOL will be greater than that of MSFT. The reason given for this happening is that the Street wants some honour to go to the NYSE instead of NASDAQ.

This doesn't make sense to me. First, both NYSE and NASDAQ are exchanges of sorts, not players. They both exist to facilitate people who wish to buy and sell securities. For any security to rise in price, buyers must be willing to pay a higher price. Buyers usually set the price they pay in anticipation of some appreciation in that price; hence, they make a profit when they eventually sell. I don't believe many buyers would be motivated to pay a higher price for a security because they want to augment the prestige of the exchange where that security is traded.

The only reasonable explanation I can find for this behaviour would be if the people making the decisions were NOT spending their OWN MONEY. Still, I'd need to find some rational motivation on their part before I'd believe they'd invest so irresponsibly.

I sincerely hope I've misunderstood the paragraph. If so, I'd welcome any clarification of its meaning.

Happy Easter, PW.
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