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To: Reginald Middleton who wrote (15313)	12/22/1997 9:34:00 AM
From: Daniel Schuh	Respond to of 24154

Right, the local antitrust expert weighs in with the definitive opinion. Reg knows all about precedence too, of course. Who knows, it could work out that way too, but personally I'll wait to hear from whichever Judge has the authority to say something meaningful on the matter, not the local omniscient authority on all things legal, technical, economic. Who's never wrong, of course. It's up to us to prove him wrong, just like Mr. Dowd thinks it's up to us to prove Microsoft's filing wrong. We'll see. Cheers, Dan.

To: Reginald Middleton who wrote (15313)	12/22/1997 6:16:00 PM
From: mike iles	Read Replies (2) \| Respond to of 24154

Reginald, Can I 'prove you wrong'?? Heck no, that would require more firepower than I can muster ... the only force that could get you to admit that you might be wrong would have to be divine ... conversion on the road to Damascus type of thing. But I will gird up my loins (oops the wife is starting to look a bit alarmed) and try to show you why you should consider, if only momentarily, that msft=$75 is a (remote) possibility. Okay ... (1) the DOJ won't let MSFT illegally leverage its OS monopoly to take over the Net. Maybe this actually makes it tougher for them to compete than someone like NSCP who doesn't have that archaic OS baggage. Especially if it takes the Redmond guys a long time to read the writing on the wall. (2)Java ... I don't know enough about this to present any substantive arguments but Java's very popularity is likely a result of MSFT's proprietary environment. Nature abhors a vacuum. (3) the current valuation ... @ $127, MSFT is trading at 12.3X sales ... as befits the collossus of the universe. This nose-bleed valuation (is there any other large company with this kind of valuation?) doesn't allow any margin for error, for even slight disappointment ... oh, say something like the courts telling them to take IE out of Win 98 and it slips 6 months. (4) slower growth ... I've only seen one analyst's forecast but I imagine they're all pretty similar ... doubt if MSFT lets them get out of line .. Anyway, the Robbie Stephens analyst is forecasting that revenue growth (year over year) will slow fairly markedly in the March and June quarters to 9% and 11% respectively, the 2 slowest quarters in a long time. He's forecasting gains in operating income of 8% and 8% for the 2 quarters. Not exactly sparkling stuff considering that the stock is trading at 48X earnings. Now it wouldn't take an awful lot to go wrong for MSFT to show negative growth, er .. a drop, in year-over-year earnings as soon as the March quarter ... e.g. if the revenue growth was 8% and operating margins declined a mere 2 points from 46% in Q1 to 44%. One expense that definitely is going up is legal. Now I know you'll say the slow growth is already known and discounted and you're right. But the dynamics can change abruptly. If they lose in court and people start to think that maybe they won't own the Net after all and growth is just a little bit slower than expected ... look out below. Instead of me justifying a $75 price, maybe you should ask yourself why you own the stock right now. Wouldn't it make sense to step aside until the legal situation is clarified? How much upside would you miss if MSFT wins in court? 10%? What's the downside if they lose? You got to ask yourself punk, do I feel lucky?? regards, Mike

To: Reginald Middleton who wrote (15313)	12/22/1997 6:47:00 PM
From: Keith Hankin	Respond to of 24154

I suspect that there are many legal experts out there who are less sure about this case than you are. But I'm sure that your legal background is more extensive than they are.

To: Reginald Middleton who wrote (15313)	12/24/1997 1:18:00 PM
From: Keith Hankin	Respond to of 24154

This is not just a breach of contract case. The contract was drawn up under the guise of anti-trust. Although I am not a legal expert, from what I can gather from what I have read about it, this makes the case quite different than simply a matter of breach of contract. For example, it appears that the judge has much wider lattitude in how he deals with it. I'd suggest that you get a law degree specializing in Anti-Trust, practice it for a while, then maybe your legal opinions will have some credibility.