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

To: J. P. who wrote (30343)	10/2/1999 10:49:00 AM
From: t2	Respond to of 74651

JP, MSFT does not buy its own puts. The article does not imply this either. They only sell puts. Another point is that MSFT has never had the stock put to them. The puts always expire worthless. I do agree that if they want to issue more puts (they have sold lots recently), then it would make sense to knock down the stock again so they can get the maximum price. However, this time maybe Ballmer was just speaking his mind. There is the possibility that he did it to ensure a steady run year over year in the stock price so the puts will never get excercised. I don't believe MSFT wants to put anyone in a position to put the shares to them. Maybe that is why they only sell strikes around 60 to 70---to ensure there is a cushion against any crash. A steady year over stock price gain also makes the employees happy. What if MSFT gains 200% in one year and loses 25% in the following. That would not be good for employee morale as they would forget about the gains of the first and only focus on the 25% loss in the second year. Then they may start doubting the company's ability to grow and look for greener pastures. I would be willing to bet that the stock would be at least 110 (probably a lot higher---120 to 130)by end of next July. Additionally a gain in one year followed by a loss would make it harder to MSFT execute their put selling plans effectively. It may scare them or make them more cautious. Conclusion: MSFT has a lot of sharp people that take a long term outlook. I remember Maffei saying that he expects employees to make money from their options in future years. That means outside shareholders also make a lot money!!!

To: J. P. who wrote (30343)	10/2/1999 11:54:00 AM
From: t2	Read Replies (2) \| Respond to of 74651

JP, Correction: The article did say MSFT buys it puts but i believe they are wrong. MSFT only sells puts.

To: J. P. who wrote (30343)	10/2/1999 1:24:00 PM
From: rudedog	Read Replies (1) \| Respond to of 74651

J.P. Did you notice that Erin Arvedlund got this exactly backwards? Microsoft's option program involves selling puts, which are generally thought of as bets that a stock will fall. No, Buying puts is a bet that the price will fall. Selling puts is bullish - if the stock stays above the strike price, the seller keeps the premium with no obligation. Where to they get these people? BTW I thought the quotes from Adam Benowitz were pretty sensible...

To: J. P. who wrote (30343)	10/2/1999 1:56:00 PM
From: Bill Holtzman	Respond to of 74651

>>after a few years on SI sick and tired of reading the usual surficial crap from all these self proclaimed "experts" and thread gurus who don't know their asses from a hole in the ground<< You're talking about yourself. Your article is bogus (see rudedog's comments). Thanks! Now I can skip your posts. PS It's s-u-p-e-r-f-i-c-i-a-l.