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

To: rudedog who wrote (41203)	4/5/2000 2:19:00 AM
From: Dwight E. Karlsen	Read Replies (1) \| Respond to of 74651

WASHINGTON (Reuters) - The federal judge who found Microsoft Corp (NasdaqNM:MSFT - news) in violation of antitrust law Tuesday said he might put an appeal of his verdict on ``a fast track' to the U.S. Supreme Court, bypassing an appellate court to speed resolution of the case, the Washington Post reported.... dailynews.yahoo.com If the appeal were expedited, it could go to the Supreme Court as early as this summer, setting the stage for a resolution as early as the end of this year -- a much shorter time period than many have anticipated... Should Jackson decide to send the case to the Supreme Court, it could be viewed as a boon to the Justice Department and the 19 states that have sued Microsoft, because it would bypass the U.S. Court of Appeals in the District of Columbia. The appeals court in 1998 dealt the Justice Department a major defeat in an earlier, related Microsoft case. Such an end-run appeal to the Supreme Court is permitted by the Sherman Antitrust Act in cases that are ``of general public importance in the administration of justice,' though in the past 25 years it has been used only once -- for a review of the case to break up AT&T..." ------ Looks like more uncertainty...

To: rudedog who wrote (41203)	4/5/2000 9:11:00 AM
From: Hawkmoon	Read Replies (2) \| Respond to of 74651

My problem with Parish is....his focus on MSFT when this is such an endemic issue in high tech, and MSFT far from the worst abuser. RD, I have to disagree. Parish himself states that the only reason he has focused on MSFT is that fact that they make excessive use of NQs which raises them a ton o' cash, which they then use as a deduction against their earnings in order to shelter them from taxes. He recognizes that other companies make use of them as well, but nowhere near to the extent that MSFT: billparish.com ""Amazon.com, Yahoo and America on Line have similar stock option programs but they are unable to unlock the cash from these deductions because they don't have adequate profits. This is probably one reason why America On Line is purchasing Time Warner, that is, to unlock these large unused deductions by offsetting them with profits from Time Warner."".... ""Since Microsoft now owes almost 800 million shares to employees in its stock option program, this debt increases $800 million for every $1 increase in their stock price. This leveraged contingent debt in itself, given that it is more than twice gross annual revenues, should result in a qualified audit opinion. Microsoft's own internal auditor, a respected Deloitte and Touche veteran, also noted in a separate issue that earnings manipulations designed to meet expectations were illegal and constituted fraud. He was given the option to resign or be fired and settled for $4 million under the Federal Whistleblowers Act (See expanded report for details)."" ""One common sense immediate step America On Line could lead is to require wages paid in stock options to be charged to earnings "only" if the tax deductions are actually realized. For most technology companies without profits or low profits, including Amazon.com, this would not be an issue until they become profitable. In Microsoft's case earnings would drop by 80 percent and integrity restored to a key sector in the market as its pyramid deflates"". I have no doubt that Bill Parish will attack AOL just a severely as he does MSFT should AOL become as prevalent a investment in pension funds as MSFT is. The issue is, just as certain large holding companies collapsing in on themselves as their paper equity assets in other companies deflated resulted in an incredible destruction of public confidence in the markets, should MSFT collapse in on itself sometime in the future, it is going to take the retirements of many baby boomers with it. And that spells another great depression in the making within the next 10-15 years if the bubble isn't deflated. $500 billion in market represents $500 Billion in investment value in various institutional and individual portfolios. The actions we've seen recently with the anti-trust suit show how the potential exists for a small slide to become an avalanche. So take it easy on Parish. From my perspective, MSFT is only his target because they are the most blatant case of such abuse of NQs and their ability to manipulate their earnings through the use of creative tax deduction. Regards, Ron