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

To: Dave who wrote (50450)	10/2/2000 10:23:17 PM
From: TraderMERL	Respond to of 74651

MSFT and Gaps. I read somewhere that the target price for a stock can be ESTIMATED by measuring the distance from the breakaway gap to the continuation gap for a stock and then tacking this distance onto the continuation gap. For MSFT the breakaway occurred at 96, the cont at 72 which would place a target of $52 on MSFT. Does anyone agree with this? Does it make sense?

To: Dave who wrote (50450)	10/2/2000 10:27:27 PM
From: The Duke of URL©	Read Replies (1) \| Respond to of 74651

"In 2000, MSFT had to increase their unearned revenue by $2B in order to make their net cash from operations" Dave, if you just don't understand how reserve accounts work, then my answer is: that, it is based on an actual number that is not quite yet income. For instance, if a product is sold with guaranteed upgrades, then the CASH received is deferred in part until the upgrades are delivered at a certain date. A less than scrupulous company might try to take all the $ into income now to make it look like they are doing better than they are, good accounting wise. If you really want MS to declare all this income early, then what you would get is overstated income and a bigger tax bill. Then you could help that waco accountant who thinks that stock options are a communist conspiracy write his webpage. :)) If you understand that these numbers are reflective of detailed contractual obligations and are still concerned I will tell you that it is very hard to change these numbers to differ from the contractual analysis. Duke