To: Brian Malloy who wrote (8035 ) 5/26/1998 8:03:00 PM From: Mick Mørmøny Respond to of 74651
Analysts: Buy Microsoft now. Some Wall Streeters say suit has brought stock down to a reasonable level. May 26, 1998: 2:29 p.m. ET NEW YORK (CNNfn) - Many investors, frightened by the high price of Microsoft Corp. stock, have been waiting for its value to drop to an acceptable level. As Microsoft's shares have taken a hit over the last month in the face of the government's looming antitrust suit, some analysts say the time to buy is now. Microsoft (MSFT) stock traded near 100 near the end of April. Since then, however, it has shed almost 15 percent, hovering around 85 for the past few weeks. But don't hold your breath waiting for it to fall any further. As Time magazine columnist Dan Kadlec told CNNfn, a precedent has been set for this kind of movement. "Since the Justice problems began [in the early 1990s], the stock has pulled back 13 or 14 percent about 20 times," Kadlec said. "It's never lasted more than three or four months. In fact, the average is about one month, which is where we are now." The best-case scenario for investors would be if Microsoft shares fell below 80. But that's not likely to happen because of the current antitrust suit, said Jeffrey Maxick, an analyst at Madison Securities. "It would [fall below 80] if there were a general market sell-off," said Maxick, "but if you can get it at 83 or 84, that's pretty good." In fact, the bullish analysts say, regardless of what happens in the government's antitrust suit, Microsoft shares aren't likely to fall much lower. "It will be a long time before the trial is over, and the stock will have gone through all sorts of gyrations in that time," Maxick said. "It's not going to be a huge surprise when the decision is announced. I don't think when the day of reckoning comes [the stock] will move that much." Michael Kwatinetz, an analyst at Deutsche Morgan Grenfell, said Microsoft is always a good buy because of its proven stability in tough times. "Tech stocks got hit hard last week, but Microsoft was pretty stable," he said. "One way to think about it is that a number of people are saying, I'd rather be with Microsoft than someone else."