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

To: Ibexx who wrote (6468)	5/5/1998 12:49:00 PM
From: Logos	Read Replies (2) \| Respond to of 74651

Microsoft's Puts I've occasionally heard about Microsoft selling a lot of puts, and they certainly sometimes act as if they're trying to slow the stock's rise, but is this really true or the imaginings of people (like me) with big long positions? Also, do other big companies also play the unannounced revenue and put-selling game, or is this a Microsoft specialty? IBM and Intel don't seem to do this, instead, they have large stock buy-back programs going on. Thanks. Haz

To: Ibexx who wrote (6468)	5/5/1998 7:11:00 PM
From: Judy	Respond to of 74651

Options Buzz: Tales from the Pit: Mister Softee Put Selling Sets Buyback Scenario By Dan Colarusso Staff Reporter 3/26/98 4:41 PM ET According to those in the pits, Goldman Sachs and Microsoft (MSFT:Nasdaq) have been working together in the options market and their union could have some interesting implications for Mister Softee traders. The word floating around the floor of the Pacific Exchange, where Microsoft's options trade, is that the Redmond, Wash., software behemoth sold over-the-counter puts to Goldman's options desk, which in turn began selling similar puts into the P-Coast trading crowd, the market makers and traders who deal primarily with Mister Softee each day. During the past week or so, P-Coast traders reported, Goldman was selling Microsoft puts at the 65 strike price in the July, October, January 1999 and January 2000 expiration cycles, traders said. None of the traders agreed to be identified. Open interest had climbed in each of those series, with the 1999 January 65 puts leading the way with more than 14,000 contracts in play. Open interest in the January 2000 options was 9,748 and hit 8,686 in the July 65 puts. The October 65 puts showed open interest of 5,600 this morning. "Companies like Microsoft don't want to come to the listed markets with this kind of trade because they don't want people to know about it," said one P-Coast trader. "No one knows what strike or what month the company sold the puts to Goldman for. It could be any exotic combination." A Microsoft spokesman declined to comment. Goldman's sale of puts at the 65 strike is probably a good hint on the price level of the OTC options transaction. Selling puts accomplishes two goals for Microsoft, traders said. The firm gets to take in premium from Goldman and if the options expire worthless, it can walk away happy. If, instead, Microsoft's shares slump the company is almost forced to repurchase its shares via the put sales at 65, effectively triggering a stock buyback and providing support for the stock. "It's fairly common and an effective way to buy back stock," said one options house strategist. "And an effective way for Goldman to buy puts." The strategist added that because the strike price was so far out-of-the-money, the trade was unlikely to have any impact on the stock price. "If they were trading closer to the strike price, it could affect the stock because traders would have to buy more stock to hedge," he said. "It would be fiscally irresponsible to shareholders." With Goldman then selling puts in the listed market, the price of protection came down and market makers were more than happy to lap it up. Because market makers are typically long the stock, they'll sell calls and buy some protection in the form of the cheap puts Goldman was peddling. The excess inventory on the floor effectively kept Microsoft's implied volatility low on Wednesday, despite the stock's quick 5-point jump. Traders didn't mind seeing that either. Goldman also declined to comment, citing the firm's policy of not discussing its trading strategies. * * * * *

To: Ibexx who wrote (6468)	5/6/1998 11:46:00 AM
From: Flair	Read Replies (2) \| Respond to of 74651

Ibexx & all, - "Poll - By 5-1 Margin, Americans Oppose Lawsuit Blocking Release of Windows 98" PR Newswire - May 06, 1998 11:06 Pollsters Hart and Teeter say Americans Want Competition in Computer Industry To Be Driven by Consumers and Marketplace, Not the Government WASHINGTON, May 6 /PRNewswire/ -- By more than a 5-to-1 margin, Americans oppose the idea of state Attorneys General bringing a lawsuit to block the release of Windows 98, according to a public opinion survey conducted by nationally recognized pollsters Peter D. Hart and Robert M. Teeter. By a similar 5-to-1 margin, Americans believe the best way to ensure competition in the computer industry is to let consumers and the market decide, rather than by Attorneys General trying to impede the release of Windows 98, according to the survey. The survey of 1,002 adults nationwide was conducted April 29-30 and had a margin of error of 3.2 percent. It was commissioned by Microsoft. Hart, a Democrat, and Teeter, a Republican, are best known as the bipartisan pairing that conducts polls for The Wall Street Journal and NBC News. Peter Hart and Tom Riehle of Hart-Teeter Research will be holding a conference call with reporters to discuss the results of this survey at 2:30 p.m. (EDT) on Wednesday, May 6. To participate in this call, please call 1-888-286-6986. Please ask for the Microsoft call. According to the survey, Americans believe -- by a margin of 68 percent to 13 percent -- that it's a bad use of taxpayer dollars for Attorneys General to bring a lawsuit that blocks Microsoft from releasing Windows 98. They are equally convinced -- 68 percent to 13 percent -- that state Attorneys General should not try to force Microsoft to remove Internet capabilities from Windows 98. "Americans see a role for government regulation-in food, drugs, securities, financial markets, consumer protection, and many other areas," said Hart. "In the minds of most Americans, however, blocking the release of Windows 98 falls far outside the area of appropriate government regulation. Indeed, when we asked which of two statements comes closer to their opinion, only 14 percent said their state's Attorney General should block release of Windows 98 in order to maintain competition in the industry, while 77 percent said the best way to ensure competition in this industry is to let consumers and the market decide -- without government intervention." According to Teeter: "Americans just do not see a need for this dramatic action against a product poised for release. Four out of five Americans credit Microsoft with helping the economy, and three in four credit the company with benefiting consumers. That's why only 13 percent think a lawsuit blocking the release of Windows 98 is a good use of taxpayer dollars." In other findings, 79 percent of Americans believe Microsoft is contributing to the nation's economic growth, and an even higher number, 87 percent, believe Microsoft's success has helped stimulate the growth of the computer industry in the U.S. Among the questions asked in the survey were the following: Do you think that your attorney general should bring a lawsuit that blocks Microsoft from releasing Windows 98 in your state, or should they not bring such a suit? Should bring suit 12% Should not bring suit 64% Not Sure 24% Do you think that it is a good use or bad use of tax dollars for your attorney general to bring a lawsuit that blocks Microsoft from releasing Windows 98 in your state. Good use 13% Bad use 68% Neither 3% Not sure 16% Which of the following statements comes closer to your opinion on this issue: Statement A: The attorney general in your state should block the release of Windows 98 in order to maintain competition in the industry. Statement B: The best way to ensure competition in the industry is to let consumers and the market decide without government intervention. Statement A 14% Statement B 77% Not sure 9% Should your attorney general bring a suit to try to force Microsoft to remove the Internet capabilities from the Windows 98 software sold in your state, or should they not bring such a suit? Should bring suit 13% Should not bring suit 68% Not sure 19% Do you feel that Microsoft is currently contributing to economic growth in the United States, or are they holding back economic growth? Contributing 79% Holding back 8% Not sure 13% Microsoft's success has helped stimulate the growth of the computer industry in the U.S. Strongly agree 62% Somewhat agree 25% Somewhat disagree 3% Strongly disagree 2% Not sure 8% SOURCE Hart-Teeter Research /CONTACT: Jennifer Curley, 202-326-1768, e-mail, jennifer_curley@dc.edelman.com; or Adrienne Woodward, 202-326-1709, e-mail, adrienne_woodward@dc.edelman.com, both for Hart-Teeter Research/