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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: RTev who wrote (29546)	9/15/1999 5:07:00 PM
From: Frederick Smart	Read Replies (3) \| Respond to of 74651

MSFT's Fraud Mechanics... Many of you know that I've been an active commentator on Microsoft, it's ethics and monoplistic practices for the past 2 years. Earlier this year I composed a 25-30 page White Paper about "The Microsoft Monopoly" - actually an email text message - which was sent to hundreds of congressmen, senators and media outlets all across the country. I was asked by assorted individuals who follow my writings on the Internet to write this piece. The response received from those who sent this information to these lists confirmed that I did make an impact. I felt all along that Microsoft is a technology pyramid which intimidates while sucking the energy of innovation out of the technology development world. Their practices in this area have common threads which are oftentimes as predictable as they are destructive. Bill Parrish's piece about Microsoft's financial fraud (http://billparish.com/19990707arthurlevitt.html) confirmed a long held belief of mine that Gates has been manipulating the financial markets to play along with this unique financial pyramid scheme which ties their deliberate use of put option selling strategies to raise hundreds of millions of dollars each quarter. Microsoft's massive put selling strategy has gotten so large it now takes more and more energy to pull off the feat each quarter. Wall Street knows this game intimately and because of this awareness there has been an implied "floor" of support under Microsoft's stock price. The mechanics go like this: 1) Microsoft sells put options 2) Wall Street buys those options 3) The options are priced with a preferred implied rate of return greater than T-Bills. 4) After buying the put options, Wall Street turns around and sells calls and buy the underlying stock which support the stock price. Because this strategy has grown so large it is forcing Microsoft into unique option partnerships will fewer and fewer major Wall Street firms. I believe Goldman is the prime beneficiary of this strategy - allowing them to earn a 100-200 basis points above the Fed Funds rates on a growing hoard of cash. In effect, Microsoft, much like it's dealings in the technology world, is forcing the marketplace into playing along in a game which makes these practices more fixed and therefore open to more abuse and fraud. Wall Street is too scared to stop the game for alot is invested in keeping the truth from getting out. Parrish's goal of deflating 75% of Microsoft's market value would have more immediate ramifications to the professional traders who price these options and continually roll over their long positions in the underlying stock. Much of this stock is booked in highly leveraged positions which are geared to capturing this excess rate of return in the derivative option strategies. Exposing this game could force professional market participants to unwind their long positions prematurely as their is an undisclosed risk that a potential SEC investigation of Microsoft will force them to pull back from the table, thus removing the fuel which drives this "game". In effect, they may not be able to meet their put selling obligations. So there you have it. Comments anyone? Peace. GO!! ...and buy more Novell!!