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

To: Sonki who wrote (12842)	12/1/1998 3:30:00 PM
From: johnd	Read Replies (4) \| Respond to of 74651

Sonki, Tech2000, ed and other bulls: We must realize it is not in MSFT's best interest to see 100% price surge. They want the stock price to keep pace with their earnings. MSFT has been buying back it stock around 45 - 50 PE for the most part and in the low 50s PE recently. They like theie stock to trade between 50 to 60 PE under current interest rate environments. Sharp run up does 3 bad things for MSFT (a) It cannot offer stock options at reasonably attractive price to new hires and thus cannot attract talent unless incurs higher labor costs in salary (b) It cannot generate cash from selling put warrants (c) It cannot buy back its own stock. (a), (b), (c) are bad for MSFT in the long run. So if the stock hits 140ish by Jan, we should expect a very negative Greg Moeffi who will talk the stock down and the stock will be back to high 120s to low 130s level. From Jan to April. Here are right levels for MSFT Now to Jan 20th : 100 - 130 Jan20th - April 20th : 110 - 140 April - Jun : 120 - 150 Jun - Sept : 135 - 170 For the the people who are expecting a stock split, my best guess is that it won't split till September99, when the stock will hit 170 to 180. You heard it here first. johnd