and here is a list you can compare all those "hits" you get of stocks trading under $58, and making about a buck per quarter......
make sure none of the stocks fall into any of these categories.... then you'll have a real list on your hands to research......
31 categories that you wouldn't want to be in........
1. MSFT released their true Pro forma Earnings for Q2 2002..(at the end of their earnings report)... and these state that MSFT only really earned .29 cents, not .49 cents as you all were led to believe, it is less because now the SEC is about to require companies to take into account the expense of paying employees all their forms of compensation.......including ESO's.......and MSFT is preparing for that day when this will happen.....MSFT is preparing for that day by issuing a second set of earnings numbers that is more realistic......the true total earnings according to these issued Pro forma earnings in the last 12 months is .64 cents.......... now those are some pretty pitiful true earnings......
oh, and that 29 cents still includes a third of the money coming from "investments" from guess where, treasury bonds........ rather than operations..... that is how poorly they are putting your money to work for you "shareholders".....
2. MSFT made $2.28 billion in the Q2 2002 quarter, that annualized is $9.12 billion........ that divided by all dilutive instruments (share count of 6.2 billion including outstanding options for total share count) is about $1.50 per share, considering this is a recession, let's give them the benefit of a doubt and double it... so it maybe someday $3.00 earnings for a good year....if you instead put the same $60 you would spend to buy a MSFT share into a treasury bond yielding 5% with complete safety, you would be getting $3.00 from this source with no risk instead..........
that is why Warren Buffett does not and would not invest in MSFT..... smart man.......gee i wonder why MSFT is having trouble with even the $70 level.... well duhhh.....
3. MSFT makes about $27 million per day, yet with your cut per share, you couldn't even buy half of a french fry with this money you would be getting with your cut per share...... yet you are risking almost $60 for this type of return.........That puts in perspective how really "profitable" your money is brought to work for you by your management, and remember, a third of that money is coming from "treasury bond investments"........... that is how badly operations is performing per share...... and how ridiculously overvalued MSFT became three going on four years ago......
4. MSFT has $36.5 billion in current assets minus current liabilities, which is about 10% of the share price per share (considering all potentially dilutive instruments to the MSFT share count), if someone were instead to put their equivalent share price in a treasury bond, they would get about the 10% in cash in about two years, where if they kept it in MSFT stock, MSFT employees and management have said that there is no way in h*ll that they will give shareholders any of that money sitting in the bank........ so i would assume that includes the next two years...... so now you have a way of getting your hands on an equivalent amount of money in a shorter period of time than MSFT has said they will ever show you any of that money that you are supposed to have control over............
let's put it another way, if all shareholders of MSFT put their money in Treasury bonds instead of MSFT stock, they would get about $36.5 billion in returns in about two years..... MSFT took more than 10 years to buildup these returns, (and that money came not from sales of products, but from employees prepaying their wages over at MSFT) that is how badly MSFT is using your cash........ and MSFT earnings are not predicted to grow any faster than just leaving that money in treasury bonds........ now that is the scary part.........
5. in the last five or six years, MSFT has been creating and selling new MSFT shares to the market, collecting money for selling these (new) shares and putting that money in the bank as cash flow..... the amount of money they have received by doing this, plus the tax credits they have gotten because of selling these shares, plus the "investments" they've made in the stock and bond market, have added up to about $36.5 billion in cash........ which equals the amount of "cash" they have sitting in the bank....... this means that all of their profits from operations have been instead going to paying expenses...(mainly employee pay expenses).... meaning, MSFT has become a non producing Company........ operations have become immaterial... they make about what they are truly spending (including all forms of employee compensation)
6. MSFT legally insider trades its own stock thru put warrants in order to make money on its stock.... something that has resulted instead in $billions of dollars in losses...(because MSFT stock has done so badly).....(update, MSFT has suspended this program, and bought back all outstanding warrants because of the massive losses they were experiencing) let's hope they don't start gambling in the market on their own stock again..... and what's worse, it was all legal to insider trade their own stock, they legally insider traded their own stock..... yet still couldn't outwit the market.......
7. MSFT pays no federal income taxes for several of the last many quarters...... a scheme in which Shareholders bear the burden of paying employees instead of MSFT's cash........ resulting in a lot of MSFT's cash flow..............
8. MSFT has more outstanding employee stock options by more than double than they claim they have in normal diluted earnings GAAP reports they show as earnings releases to the street....... then in their own calcs, they say they are buying back these missing shares, yet then forget to buy the shares back, so that the shareholder bears the full burden of dilution to their stock.....
9. MSFT has more outstanding options in value than they do have cash to be able to buy enough shares to prevent any future potential dilution.......
10. MSFT makes more money from its stock and option schemes based on its own options and the tax kickbacks it uses than it makes from profits from selling its software.
11. MSFT, if it paid employees in cash instead of issuing new options every year diluting your existing shares, would have LOST money in the year 2000, and most likely in 2001 too.... (this is what they show the IRS (and why they are able to pay no income tax most of the time), yet they fail to show you shareholders these IRS figures)..... anybody see something wrong here yet?.
12. MSFT is now losing money on stock investments in the stock markets, investments that they supported past earnings with exaggerating growth..... that's a loss to earnings growth for future quarters that don't have these investment gains to look forward to......and why MSFT has been showing negative growth in earnings for the past several quarters.........and the bonds they have shifted too are underperforming any growth they used to show..... Guaranteeing slower growth....
13. MSFT claims investment gains as regular earnings in earnings releases.... yet when it loses money in these same stock market gambles...... MSFT takes one time charges from these same earnings..... a clearly manipulative way to report earnings........
14. MSFT's stock price is less than it was more than three years ago today......... something other well managed stocks are not experiencing......
15. Boeing is moving some manufacturing and its head quarters out of the seattle area because of distorted real-estate prices caused by past MSFT employee pay inflation, employee pay inflation that was paid for on the backs of existing shareholders dilution, and their tax burden rather than MSFT cash.... smart if you are MSFT or an employee, not so smart if you are a shareholder.......as has been born out..........
16. MSFT's P/E is 35 based on earnings estimates that do not include one time charges or option expenses, when these true expenses are included the PE is sometimes double ..........true expenses that they are not reporting to you shareholders, yet do report to the IRS, ..... and its growth is far less than either number besides......... long term MSFT has in no way shown that they could ever get back to even 30% growth let alone 35%, or 70%..... yet the stock price is based on this PEG.......
17. MSFT's Xbox will dilute margins so much that total earnings to total sales will be effected negatively for years. Revenues will increase dramatically, due to hardware sales with loses on each sale.....but none of it will translate to earnings for years to come... if ever......and only then if Sony and Nintendo decide to no longer enter the business...... remember total sales were only $9.4 billion for the entire industry including games in 2001..... with cut throat competition, margins are less than 10%..... even negative for MSFT........ even if MSFT were to take over the entire industry, the money produced per share would only be 15 cents for this last year........ and that's if Sony and Nintendo just disappeared, which will never happen......(update, XBOX sales are now slowing beyond even the most pessimistic projections, guaranteeing losses far beyond the three year estimates, probably forever)
18. MSFT will have one time charges due to settlement after settlement to companies like AOL and BEOS and SUNW and to the EU and to other countries and to consumer Civil Suits in the range of $billions of dollars each, creating even less value per MSFT share.......
19. the states will take the current antitrust suit, and take it all the way to the supreme court if they have to, tying up MSFT's company and stock price until this matter is resolved.....
20. MSFT loses money on all of its .Net strategies and other strategies (including MSN and MSNBC), and loses money on XBOX..... the only things they make an operating profit on is it's core business of OS and Office. yet they are transitioning these profitable businesses for the losing strategies of the .Net........
21. besides MSFT LOSING money on a cash basis if it paid its employees in all hard currency rather than stock options..... guess who's assets are taking up the slack..... anybody holding MSFT stock. while MSFT employees quietly convert their stock into cash, and their new pay comes from options at shareholder expense...... so MSFT employees are selling stock as fast as they can, and replacing them with options.... even Bill Gates is selling as fast as he can......
22. MSFT's scheme of getting kickbacks from the government in the form of Taxes, can only work if the stock continues to go up....... which can no longer happen, if it is already overvalued by more than double according to it's P/E. the stock has stagnated for three years going on Four, and even this can collapse the entire scheme. MSFT is already showing signs of the strain on its own stock option scheme..... Cash flow will dry up if Employees refuse worthless options on a declining stock and demand cash instead..... a lose lose for MSFT shareholders.... or if they are awarded ever increasing reissued options, the stock also declines because of the added dilution.... still a lose lose for shareholders....... you are all caught in a very bad situation...... figure it out, before it is too late.......
23. MSFT reissued replacement options when its stock went down to cover "out of the money" ESO's, creating a win win for employees no matter if the stock goes up or down..... this situation creates a lose lose for shareholders though, who got no such get out of jail free deal.......... if MSFT replaces options again, it may mean a total collapse of the entire MSFT scheme within days after a new reissue because shareholders are starting to wake up to this insult to their own shares........... it will be a catastrophe for the entire market...... the situation is becoming closer at hand every day that MSFT stock is reevaluated in the market.......
24. MSFT in the internet Server market, has less than 27% market share, and has been losing share by about 1% per month for many months now ever since the code red worm came out, when internet sites became fed up with poorly secured buggy software and began switching to alternative server software sources......(from Netcraft)...
25. MSFT stock in the stock market, has been losing ground to other company's stock for three going on four years after both a raging bull market, and a total collapse of that same market.......Meaning MSFT has underperformed for the entire period.....
26. MSFT in the ISP market, doesn't even have 6% market share, and that Share was almost cut in half in the last year, and is losing share constantly, even with their promotions where some MSN users got two years free, or equivalent amounts of merchandise....., when MSFT reports higher growth rates, they are on much smaller numbers than the rest of the ISP market, even AOL nearly added more users in a single year than MSN has altogether..... even with AOL's lower growth rate but with its massive base.......
27. MSFT in the Game Console Market is dead last in market share, and market share of Game sales too, and fading...... already... MSFT claims "one" of the best introductions, but failed to mention the only other two competitors had even better introductions, making XBOX dead last, yet "one" of the best introductions..... whatever.......
28. Settlements are due for american consumer Civil Suits, from EU, from Brazil, other South American countries.... they are very likely from SUNW, AOL and other american companies....(update, AOL and BEOS and SUNW have now all sued, leaving many more to follow) a drain on both shareholder time and cash.............
29. MSFT has over 850 million options outstanding, if it wanted to keep from diluting its share count any more, it would need to buy back $50 billion worth of stock, yet it only has $36.5 billion to do it (current assets minus current liabilities)..... see any problems yet? that means guaranteed dilution, on top of that, MSFT granted for example 600 million options in the last three years...... yet only bought back about 188 million shares in the same time period..... meaning even more dilution ontop of that $50 billion worth.......every single year....... if MSFT were to stop issuing options altogether, its cash flow would dry up, because most of it came from these ESO's and the tax credits produced..... meaning the stock would collapse, because investors now look to cash flow as "true" company worth per share...... but if MSFT keeps issuing ESO's the dilution becomes staggering, so the stock price collapses..... because investors now look to cash flow per true share count to measure "true" company worth........ anybody see some problems there???? well if you don't, the market is telling you loud and clear.......
30. win lose or draw the antitrust decision, MSFT will live or die by how they play the "game" going forward, if MSFT goes back to the way they used to be, where they won the game, by making sure everybody else wins too, then they will be successful, if they continue on this current path of destruction though that they started about five years ago, where in order for them to win, they must crush their suppliers, their customers, their competitors, their government, everyone..... then they will fail as a going concern, the choice is not anyone else's except MSFT's..... let's hope they do the right thing.... (game theory).....
31. Netscape's IPO was the very start of the internet revolution and the beginning of the great bull market, MSFT's refusing to settle , before the judge ruled them an abusive monopoly in march of 2000 for crimes against this new IPO this new technology and this new market, was the pin prick that burst the bubble, and caused the great crash.......... i don't know which is worse, the thought that the arrogance of MSFT brought the market down, or the fact that they crushed the cause of the great bull market in the first place.....
and you wonder why MSFT's stock is doing so badly..... well duhhh........ when you change from a philosophy of win win for you and everyone around you as MSFT had before 1995 to one of win at the cost of everyone around you as MSFT has demonstrated ever since 1995, then you are doomed to failure......
until next time.....
jon. |
