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

To: Offshore who wrote (30047)	9/24/1999 12:12:00 PM
From: Serge Collins	Read Replies (2) \| Respond to of 74651

Steve Ballmer fired a cheapshot across the market's bow. Why did he feel this compulsion to tar the whole market? If he really feels that MSFT is overvalued, why didn't he say so six months ago or two years ago? There are issues of corporate governance involved here. As a senior officer of Microsoft, he has an obligation to shareholders, but it's clear from his comments that he has been recklessly abusive towards them. If Microsoft is overpriced, and few would argue that it is, then he should either remain quiet about it or denounce the "irrational exuberance" that has led us here. But you do not criticize the valuation of all tech stocks because you feel your stock is overpriced. That is unacceptable and cowardly. I can't remember a senior officer making such a comment before. Of course, the fact that he has been excessively rewarded by this market over the years and is comfortably rich beyond decency is a moot point for him at this point. Ballmer is biting the hand that feeds him. He claims that option-based compensation is becoming difficult because of the high stock price, but he neglects to mention that this method of compensation is the fuel that has in large part ignited the boom in the share price of companies like Microsoft. He doesn't even see the irony of it all. Companies like Microsoft have artificially enhanced their earnings by paying their workers with stock options, but this is starting to come back to haunt them now as dilution is catching up to them. That works for a few years but eventually the growth in shares outstanding outpaces the growth in earnings and when that happens it begins to have a negative effect on the bottom line. It is sad that this guy complains about valuation, yet has benefited handsomely from these same valuations. He is the fourth richest man in America and he got there because of the stock market's exuberance. What a hypocrite!