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

To: PMS Witch who wrote (36894)	1/19/2000 10:33:00 PM
From: Henry D.	Respond to of 74651

Your view is very plausible .Has there been any stock buy-back plan announced recently ? Such a plan if real should have been submitted to the SEC and get approved before being implemented I suppose ? Regards

To: PMS Witch who wrote (36894)	1/19/2000 10:40:00 PM
From: Valley Girl	Read Replies (3) \| Respond to of 74651

Nancy (with apologies to PMSW): I got your message and decided to combine my reply with a public post. I did not find anything surprising in the MSFT earnings, the only disappointment was the overwhelmingly negative reception it got. I tend to look beyond any particular quarter to the health of the underlying business in any stock. As I've said before, there are lots of reasons to be concerned about the business at this point in MSFT's history. The company is very dependent on the overall growth of the PC market. This market is slowing in the developed world, not because it's being displaced by alternative devices, but simply because of high penetration. There's still plenty of reason to be bullish about world-wide PC demand, but I'll bet the bulk of the growth will likely come from countries, such as China, where theft of MSFT's products is rampant. (For Intel and the boxmakers, the problem is different: unit demand may be strong but the price level most people are paying continues to fall dramatically.) Upgrade cycles for OSes and Office are great as cash cows but aren't likely to deliver 40% revenue growth. For that, MSFT has to become a player in some markets where they currently aren't. The two obvious ones are handhelds, where as I've said before MSFT seems to be stumbling badly, and back-end servers (the OS plus back office), where in my opinion a significant threat is posed by Linux. Nearer term, and again I've been expecting this, all possible good news is now out, and for the next few months there's nothing but a rather ugly-looking series of legal events to come. MSFT's recent statements leave little doubt that there's no real hope of a settlement. Surely that has to weigh on the stock as traders brace themselves for the almost certainly negative outcome of the anti-trust action. By the standards of the real economy, MSFT's growth rate is still quite high even assuming management doesn't find some way to navigate the troubled waters they now find themselves in. It's just not the kind of growth people pay 100 P/Es for.