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

To: Just_Observing who wrote (43598)	4/27/2000 1:35:00 AM
From: Gerald Walls	Respond to of 74651

Now MSFT has gone and issued another 70 million shares to employees. This will put downward pressure on the stock. This is exactly the wrong thing to do. I'd say that so far MSFT has a much better record that Fleckenstein. How long has he been short Intel?

To: Just_Observing who wrote (43598)	4/27/2000 2:56:00 AM
From: Jacob Snyder	Read Replies (2) \| Respond to of 74651

re: buying back stock: If the company buys back a lot of stock, while that stock is near the lowest PE of the last 3 years, that is good for existing shareholders. My shares represent a larger fractional ownership of the future income stream, with every share they buy back now. I wonder if the 70M options just granted is instead of the routine yearly options to be granted in July 2000.

To: Just_Observing who wrote (43598)	4/27/2000 3:34:00 PM
From: Brian Malloy	Respond to of 74651

Risk? A two headed beast at least. Where one sees danger, another sees opportunity.

To: Just_Observing who wrote (43598)	4/28/2000 9:20:00 AM
From: GVTucker	Read Replies (2) \| Respond to of 74651

Just Observing, RE: If we have a severe market correction ( MSFT into the 50s -a low probability event), MSFT could lose billions of dollars, unless they have begun to cover some of their 163 million puts. These are trying times for MSFT and, IMHO, the new 70 million options granted to employees is a dangerous decision. Just to play Devil's Advocate, think of the new 70mm options grant in another. MSFT is now short calls for 70mm shares of stock. Thus, they have not only transferred some costs that have would have otherwise been a direct cash outflow (due to either the cost of employees leaving or the cost of more attractive cash packages), but they have also actually hedged a significant piece of the 163mm shares that result from the short puts. So instead of increasing the balance sheet risk with the 70mm of options to employees, MSFT has actually decreased the balance sheet risk.