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

To: Tae Spam Kim who wrote (48324)	8/3/2000 5:12:01 PM
From: David Howe	Read Replies (1) \| Respond to of 74651

Tae Kim, Not a bad analysis, but you're forgetting that MSFT looks fairly valued or even undervalued by today's standards. << The foundation for future stock appreciation is the future growth potential of a company. To value companies many analysts compare a company’s P/E ratio with its future growth rate and expect parity. Currently the Microsoft has a forward P/E of about 40, which puts the future expected growth rate at around 40% a year. >> Take a look at CSCO, ORCL, SEBL, practically any large and successful tech company. They are trading not at PEs similar to their growth rates, but at PEs 3 - 4 times their growth rates. If MSFT grows at 20% they are only trading at 2 times their growth rate. That makes them look like a lot better investment than the other tech companies; by your own logic. Dave

To: Tae Spam Kim who wrote (48324)	8/3/2000 5:35:04 PM
From: David Howe	Respond to of 74651

<< And to top it off the company itself forecasts only 15% revenue growth this coming year. >> And they will probably beat that number. I'd say that 15% - 20% growth for MSFT is still quite likely. As an investor I can live with returns at that level, or even a few % less than that. My guess is that over the next 10 years MSFT stock will increase in value at an average rate of around 12% - 16% per year. Again, just fine for the investor with reasonable expectations. The recent decline in MSFT has taken the fat out of the valuation. There is little risk remaining, and very likely, steady moderate growth ahead. Dave

To: Tae Spam Kim who wrote (48324)	8/3/2000 7:19:03 PM
From: Rusty Johnson	Read Replies (2) \| Respond to of 74651

Microsoft licensing deals confuse customers, study says By Joe Wilcox Staff Writer, CNET News.com news.cnet.com Corporate customers investing in Windows 95, 98, NT or 2000 had better read their purchase contracts closely: Some are buying more software than they need. Market researcher Gartner has issued a report that says confusing and ornate contractual terms in Microsoft's licensing agreements are forcing many corporate customers to buy two copies of Windows 2000 for the same computer or to invest in additional upgrade packages. "Clients are calling us and saying, 'Microsoft is insisting we buy upgrades for Windows versions we already got with the machines,'" Gartner analyst Neil MacDonald said. Six Gartner clients have complained about the practice during the past few weeks, he added. Not so, says Microsoft, which argues that its customers and Gartner misunderstand the rights granted by its software licenses. Regardless of the philosophical aspects of the debate, one thing is certain: Unless businesses buying Windows on new PCs take the right precautions, they could be compelled to pay twice for the operating system. The wrinkle occurs because of a discrepancy between how corporate customers acquire their software from Microsoft and how they buy their computers. A number of businesses buy software from Microsoft through the company's "Select" licensing program. These companies also invariably buy computers that come preloaded with Microsoft software. For years, customers have used programs such as Symantec's Norton Ghost to delete the software that came with the computer and install their own "software image" purchased via the licensing agreement. The software image is the bundle of software, including applications and the operating system, that resides on each corporate computer. Usually, the software image is burned in after the customer buys the computer. ... Microsoft hotly denies this contention and says the problem occurs because the two Windows versions--the one that came with the PC and the one added later--cannot be considered the same. "The first important point is that we are absolutely not trying to overcharge customers," said Noury Bernard-Hason, Microsoft's group product manager for Windows. "It's unfortunate that the analyst who wrote the memo chose to take that view. That's certainly not what we're doing." Gartner laid out a typical scenario: A corporation purchases 5,000 PCs from Hewlett-Packard with Windows 2000 installed. But the company puts its own custom software on the systems using Select media provided by Microsoft. By Microsoft's interpretation, the customer would be required to pay an extra $117 to $157 per computer--or $585,000 to $758,000 total--for the right to install the Windows 2000 it had already paid HP for. "Depending on how you re-image your machine, Microsoft wants to charge you twice," MacDonald said. "And they're actually using this in contract negotiations with clients" There they go again. Best of luck.

To: Tae Spam Kim who wrote (48324)	8/4/2000 5:37:13 AM
From: John F. Dowd	Read Replies (2) \| Respond to of 74651

TK: I guess MSFT should rollover as they have been TKO'd eh?They are the best of all investment opportunities. One they sell at almost value oriented multiples 40x trailing and thirty x forward. Their future is extremely bright as they have a host of new products just now coming into the market place. Their investing prowess is an added fillup that carries them through start up cycles.PC sales have been forecasted to be slowing every year for the last decade and they just keep going and going like the Everready Bunny. I plan to buy a new one this year. Bought 3 for my kids last year. Yes MSFT is dead long live MSFT! It would take too much room here to enumerate them all. Thanks for warning us as to who you are involved with; I'll pass on visiting your "esteemed" web site.