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

To: Yaacov who wrote (35232)	12/9/1999 11:47:00 AM
From: taxman	Respond to of 74651

Linux will topple Microsoft. regards Corel (CORL) 39 13/16 +11 1/2: In yet another example of "the YAK market" as described in today's Stock Brief, Corel was just $8 a share one month ago! What has happened to make it worth five times that today? Exposure. There hasn't been any new development in the company, frankly, that changes the overall outlook of the company, in the last thirty days. We do like the fact that Corel is experimenting with the ASP model, as we mentioned in the December 6 Story Stock. But that isn't a driver for adding $2 billion worth of market cap this month. (Corel has 64.1 million total shares; it is now worth $2.5 billion.) But the volume tells it all with Corel. on November 9, four million shares traded, when the stock closed at $8 1/4. On November 29, 57 million shares traded, when the stock rose from $14 to $20. Today, after just one hour of trading, 15 million shares have traded. The Linux "craze" is overwhelming, and with today's IPO of VA Linux, everything Linux related is soaring. The fact that multiple vendors of the Linux operating system will keep all of them from enjoying the kind of monopoly power that Microsoft was built on, seems to escape everyone who believes Linux will topple Microsoft. Linux may well topple Microsoft, especially if software applications can become web-based services that you rent, instead of buy. But the revolution is still a longshot at best. And if the ASP revolution does happen, Sun Microsystems, a trusted vendor to corporate America, will probably be the biggest beneficiary, not Linux firms. Microsoft derives over $5 billion in revenue annually from operating system sales, with a gross margin of close to 100%, since PC vendors pay only a royalty to install the software "image." There is simply no way that any single Linux vendor is going to reach that kind of sales level ever! So why are Linux stocks going straight up? Like we point out in today's Stock Brief, "It's a Yak Market" and everyone and their mother wants to buy CORL. It's no more complicated than that. - RVG Copyright ¸ 1999 Briefing.com, Inc. All rights reserved.