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

To: ed who wrote (30126)	9/26/1999 12:30:00 AM
From: Mick Mørmøny	Read Replies (1) \| Respond to of 74651

MSFT is down $6.625 for the week. It's peanuts. You said you have plenty of time. Then stop whining. Your're smart enough to discern the fundamental meaning of stock ownership. Here's an excerpt from the Motley Fool "...it should be remembered that stocks represent ownership in a company. Contrary to recent popular belief, they are not designed to be lottery tickets, where random luck provides immediate and substantial gains. They are issued to raise money that company management can invest in order to make more money. When you buy a share of stock, you are becoming a partner with all of the other people who have invested money and believe that the company can profitably execute its business strategy." In addition, as a MSFT trader and/or investor, you should understand what Ballmer said was nothing new. The following article might refresh your memory about Ballmer, Maffei and even Gates' perspectives in the past. And if you can't take risk, volatility, sudden changes of the equity market, etc., you know what to do with cash. $$$ Microsoft Stock Hurt By Own Exec's Words Filed at 2:10 p.m. EDT SEATTLE (Reuters) - Microsoft President Steve Ballmer's rattled an already shaky stock market this week merely by restating a view long-held by executives of the software giant: that technology stocks are overvalued. *For* years Ballmer and others including Microsoft Chief Financial Officer Greg Maffei have cautioned investors they believe the company's stock is overvalued. Until this week, their cautionary remarks have done little to stem the rise of Microsoft. The software giant's shares have gained 65 percent a year on average, making Microsoft the world's most valuable company with a market capitalization of more than $500 billion. But Microsoft and other technology stocks fell sharply Thursday after Ballmer repeated his long-held view to reporters at a journalism conference. In apparently offhand remarks, he expanded his view to say he thought unspecified other technology companies also were overvalued, and the tech-heavy Nasdaq suffered its fourth-biggest price decline ever. Analysts said his remarks spooked a market already jittery because of interest rate concerns and the uncertain impact of the Taiwan earthquake. ''I think if you didn't have those two factors Ballmer's comment would not have hurt as badly as it did,'' said Jeffrey Maxick, research director at Madison Securities in Chicago. ''It's not the first time someone from Microsoft has said their stock is overvalued.'' Indeed, at the company's annual meeting with financial analysts in July, Maffei suggested Microsoft's stock valuation was approaching ''ludicrous'' levels and was high even relative to other potential investments. Ballmer himself is famously bearish about Microsoft's prospects and said at the same meeting that expectations the company could continue to grow revenues at a 25 percent annual rate were ''outlandish and crazy.'' However, analysts said Ballmer's broader comments about the technology industry this week likely were unplanned. ''He has a tendency to shoot from the hip,'' noted Bill Whitlow, a money manager for Safeco Corp. mutual funds whose biggest position is in Microsoft. Microsoft, which was off about 5 percent Thursday, lost another 25 cents a share in Nasdaq trading Friday to close at $90.94. Analysts said Microsoft executives have two motivations for talking down their stock: to keep earnings expectations reasonable and to hold down the value of the massive ''overhang'' from stock options granted to employees. But analysts also noted that Microsoft executives from Chairman Bill Gates down truly are worried about potential threats that could dethrone the company from its current position of unchallenged dominance. ''I think Gates sets that tone,'' said analyst Mike Kwatinetz of Credit Suisse First Boston. ''In their heart of hearts they probably believe everything is overvalued. They're always nervous about what could go wrong. It's part of what makes Microsoft a great company.'' He and other analysts noted that nothing in Ballmer's remarks suggested there were any fundamental problems with Microsoft or its financial results. Maffei said Thursday the current quarter's business was ''fine'' and said there were no factors that would cause him to recommend analysts change their estimates, which Microsoft routinely beats. On average analysts estimate Microsoft will report earnings of 34 cents a share for the current fiscal first quarter, up 21 percent from last year's 28 cents, according to First Call. Several brokerages Friday recommended that investors buy Microsoft on any weakness stemming from Ballmer's remarks. ''It's difficult to disagree with Ballmer's assessment on the condition of technology stocks,'' said Bill Epifanio of J.P. Morgan. But he said Microsoft was the ''exception to the rule'' and was trading near its typical premium relative to other stocks in the Standard & Poor's 500.

To: ed who wrote (30126)	9/26/1999 3:40:00 AM
From: werefrog	Read Replies (1) \| Respond to of 74651

If a stock goes down after you buy, it was a error of judgement on your part. It would be no one's fault but you're own. If you're a longterm player, you can sell, hold, or buy more. A good daytrader or swing trader loves CEO's comments, and will buy, or in this case, sell on the news.I got the news immediately after it hit the first wire and shorted msft at 94 5/8, I covered the next day at 89, then went lont for a couple points. So to me, Ballmer is a OK guy and when I do take a loss, I don't blame nobody but myself for making a bad play.

To: ed who wrote (30126)	9/26/1999 10:27:00 AM
From: Exacctnt	Read Replies (1) \| Respond to of 74651

<<<So, the easiest way to define the valuation is the price people is willing to pay. If more people will pay $95 per share than people like to pay $90, then , the stock will go up , otherwise , it will go down. That is what I mean let the market force play !!>>> Uh Ed, I think the market force did just that. After adjusting to Ballmer's comments the market force says that MSFT's value should be lower at this point in time. Tomorrow or next week's valuation is another matter. Regards