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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: Melissa McAuliffe who wrote (274)	3/23/1998 6:30:00 AM
From: Mr Logic	Respond to of 4509

Melissa, re. missing earnings, >>when it doesn't appear to be on the horizon?<< you never know when the flexibility to manage earnings - or a quarter where business doesn't flow - might come along. ORCL is a good example, earnings hit right on the nail for a long time. In PSFT's case, 'only' hitting estimates is a disappointment if .02 above is the expectation. >>With respect to $10, I am surprised you would even publish that statement here. If you had said 40 or even 30, I would not even have responded since this is not out of the realm of possibility. But $10???? That would mean losing 80% of it current value.<< My fingers did hesitate over the keys when I typed $10! But from the value perspective, it could be considered as reasonable for the company to lose $10bn of market value (down to $10) as to add $10bn (up to $90). $80 has been talked about quite freely here. Or course I know it doesn't work like that... The stock price has been in the $15s in the last 12 months so we are not outside the realms of possibility. If things stop working out so well, and the ERP market does flatten out then we are in a very different environment. Take SYBS - well regarded company in a big market, but not the market leader - after the stumbling trades at under 1x sales. I'm not saying PSFT would trade under $5 but you get the idea of what can happen if things do go off track. It is my personal view that the growth of ERP companies will flatten over the next 12 months - we have discussed why before. I would like to be holding a short position when (if) this happens. Hence being prepared to sit on a loss as now. That is why I have an ERP short. Of the top 3 vendors, not SAP as it is the clear leader, not Oracle as the business is much broader. I hope to cover my short in the $20-$25 range, unless it looks like it might go lower. That would still be ~6x sales. Patrick.

To: Melissa McAuliffe who wrote (274)	3/25/1998 4:36:00 AM
From: AlienTech	Read Replies (3) \| Respond to of 4509

>>How many companies do you know that can consistently do this quarter after quarter after quarter?? << Hello Melissa.. Remember me from when PSFT was @ 52 or so? :) You hear of a company called ADPT? They were #1 till they missed last quarter.. Did it for god knows how long, 7 years I think. And that was a company with a P/E of like 20 even with the longest running track record. Now they have a P/E of 12. And with a market share percentage larger than PSFT's in the SCSI controller business. PSFT @ 10, All they need to do is miss 1 Q and 25 is easily seen. If the Q after that dosent have very good visibility then theres 10. Cant happen? Look at APM. Different business etc I know.. Look at ORCL which got chopped in half and that company only has a P/E of 50. BTW AMZN does have a P/E of 8000 but hey, Its always a buy when your P/E is in the stratosphere :) So dont be complacent..