Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: J. P. who wrote (13310)	12/18/1998 9:19:00 PM
From: johnd	Respond to of 74651

I expect no split in Jan earnings announcement. Why? (a) Look past history of splits at microsoft.com/msft Look at intervals between splits (b) Current trailing PE ratio valuations and price to sales valuations. I think split will be after March quarter. Good runup today. But is sitting at close to 70 PE (1.98*70). My covered short 140 calls expired. That was nice. I think I will roll them up. I am still aware that downside risk is 110 at worst the downside risk is 200 day moving average which is at 100. johnd

To: J. P. who wrote (13310)	12/18/1998 10:02:00 PM
From: KM	Read Replies (2) \| Respond to of 74651

Yep, just as expected re this afternoon's action. From "Options Buzz": Microsoft (MSFT:Nasdaq) spiked at the end of trading today and had the multitudes who were short December 140 calls worried that they would be getting assigned. For most of the day, Mister Softee was hanging around 135 and the 140 strike price seemed a safe haven for options writers, who would have had to deliver shares of the software gargantuan if they were assigned. But just after 3:30 p.m. EST, the shares began rallying and closed strong at just under 138, throwing a helluva scare into the shorts. Open interest on those December 140 calls was almost 7,500 contracts. The 135 calls got deep in the money in a hurry and traded more than 13,600 contracts today against open interest to just 7,934. The price of that contract rose 2 3/8 ($237.50) to 3 ($300).

To: J. P. who wrote (13310)	12/18/1998 11:01:00 PM
From: t2	Read Replies (1) \| Respond to of 74651

Just want the February series of options to come out. I'd like to roll up to the February 140's, wait for Jan 17 or whenever earnings come out, if there's a split announcement hang on to them, if no split announcement sell the day after earnings come out. Why am I posting all this? Why not! Nobody else will do this anyways! I have been waiting for the Feb series. I had been forced to buy the April 130s and 150s and Jan 140s. I sold my Jan 120s today and had picked up Jan 140s yesterday. Last year MSFT announced a split a few weeks after earnings release because the stock did not move up after earnings (due to their cautions re: Asia). I think they will do it at earnings this year simply based upon stock price which I expect to hit about 150 by that date. They are always worried about having a stock that does not get overvalued. This time overvalued means PEs of internet stocks. The purpose of the split is supposed to make it easier for average investors to buy their shares and a price around 150 would call for a split. JP, I appreciate your comments on options strategy. If this stock by chance does not run up til about Jan 5, I am going way out of the money options (January calls) with prices of about 25 to 75 cents. Since MSFT will release earnings within a week of Jan options expiry, the additional run up (which I expect to be about 3 to 10 dollars depending on release date) from expiry to earnings will be missed by the Jan series. This is why I settled for the April 150s as soon as they came out (prior to that I only had the Apr 130s which was the highest strike price available).

To: J. P. who wrote (13310)	12/18/1998 11:17:00 PM
From: t2	Read Replies (2) \| Respond to of 74651

I expect a large run to earnings -- but I expect a major move to take place within one week of earnings. As the price increases, the anticipation of a stock split announcement will also rise. Can you imagine what the short sellers will be doing with about a week to go to earnings and this anticipation building up -- you got it, covering. Considering how easily Amazon.com moved up along with other internet stocks, is it far fetched to believe that this stock could hit 160 on the earnings release date? As someone pointed out, only 5% of MSFT's business is the internet---that is a LOT!!! I expect to see some upgrade or raising earnings estimates by mid January and this will have an immediate effect (i imagine a $10 move in the same day). If the internet stocks hold up, technology is going to fly especially MSFT. By the way, my AOL is going to get called away from me. I just don't trust internet stocks and AOL was the closest I have come to this sector (other than MSFT).