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

To: johnd who wrote (49184)	9/12/2000 4:34:07 PM
From: johnd	Respond to of 74651

Microsoft Urges Patience, Growth to Return By Marguerita Choy WASHINGTON (Reuters) - Don't be so quick to sell off your technology stocks -- growth may have paused but the industry is on the verge of a revolution, and will soon see the return of 30 percent sales growth, according to an up-and-coming Microsoft Corp. (NasdaqNM:MSFT - news) executive. ``Last April was pretty tough time for every one, but if you play for the long term, you will be more than OK,'' Orlando Ayala, Microsoft's group vice president for sales, marketing and services, told Reuters in an interview last Thursday. Microsoft's shares, which for a decade proved wildly popular among technology investors hungry for its consistent 30 percent-plus growth, have slid in recent months as the growth rate has stalled at around 15 percent year-over-year. ``The industry, (and) Microsoft will be able to get back to the 30 percent growth because we are just renewing ourselves ... Microsoft is doing it, but in general this big wave is going to lift all boats and that's what is exciting,'' he said. ==== When will the boat lift with the 30% growth?

To: johnd who wrote (49184)	9/12/2000 5:01:24 PM
From: Dave	Read Replies (1) \| Respond to of 74651

> What are the reasons? > Jan 2000 : MSFT at 120, PE of 81 Reason: "Irrational exuberance". Greenspan's Federal Reserve created unprecedented mountains of money before Y2K, and it went straight into the equities market. MSFT, as a member of both big indices, went on a senseless moonshot rally. > April - Sept 2000: MSFT at ~70, PE of 41. Reason: "Flight from quantity". After the Fed stopped printing money, the equities came back to earth. MSFT dutifully followed. Now of course the stock is still overvalued. MSFT's operating revenue growth has gone negative, the company has been found guilty of illegal monopolization and WILL be punished significantly one way or another, and there are no compelling products in the pipeline (Try to find a consumer who cares a whit about .NET but who doesn't own MSFT stock. Try to find a software developer who would rather program to WinCE than to Palm OS, or to Windows Media than to QuickTime. Try to find a major ITV player who isn't hedging its WinCE bets with Liberate and OpenTV). Yet MSFT's P/E is nearly three times the stock market's historical average. > How will this situation change? It's already started to change. The price of MSFT has been artificially stable lately, as MSFT has been steadily buying back its stock from the big mutual funds, who are still dumping. But when this exchange is complete, and normal volatility returns, expect the stock to head toward the 30's.