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

To: David Howe who wrote (66284)	3/21/2002 3:06:52 PM
From: Baldur Fjvlnisson	Respond to of 74651

By all means don't let me distract you from pushing this overpriced junk whose stock watering crimes the SEC garbage will be forced to deal with eventually. Be sure to really load up before the reverse split.

To: David Howe who wrote (66284)	3/21/2002 3:10:03 PM
From: John F. Dowd	Read Replies (2) \| Respond to of 74651

DH: With respect to that category there are not enough awards to go around. They are all uninvested liberal mental midgets who know less about tech than they do about finance or is it the other way around. Notice I didn't mention any names. But if the shoe fits wear it. JFD

To: David Howe who wrote (66284)	3/21/2002 3:13:56 PM
From: David Howe	Read Replies (3) \| Respond to of 74651

Fiscal Year 2003 begins in slightly more than 3 months. The projected EPS for FY2003 is $2.03. That would put MSFT's PE at around 30. That's a far cry from the 100 that Baldur claims. And, MSFT is in a unique position that I feel actually lowers their PE. They have more than $38 billion in cash and short term investments. If I happened to have a few hundred $billion sitting around I could buy MSFT. Now, would I be paying the entire market cap, or would I by paying the market cap - cash and short term investments? The answer is obviously that the net capital required to purchase MSFT would be the Market Cap - Cash and Short Term Investments. So, take out the $38 billion and you have a cost of the company that is around $7 less than the price per share that it trades at. This morning I would have only paid a net cost of $53 per share. That equates to a FY2003 PE of only 26. Based on historical averages adjusted for the low interest rates of today, that's a very low PE for a very important company. A company that looks to be growing and certainly has solid earnings going forward. Do the exercise for the rest of the Dow 30. You can adjust their PE's all you want for cash and debt and you will find that MSFT is the only one that the cash makes a big difference for. There IS value in that CASH and it should be taken into account when determining the true PE. A forward PE of 26. IMO, Dave PS. Save the BS about the "cost" of options. For one, there is no true cost beyond dilution. And two, the current bill that might make it to Congress does NOT include changes to income reporting from EXISTING options. The MSFT-bashers are wasting hot air if they think MSFT's EPS will be lowered by their existing option grants.