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

To: JP Sullivan who wrote (14777)	1/19/1999 11:57:00 PM
From: Dan Spillane	Read Replies (2) \| Respond to of 74651

The bottom line is the stock price currently does not take into account a spending bust which is likely to occur before the end of the year. A stock price is supposed to price in the future. Are we to totally ignore what the CFO said, and what major customers are saying? No, we needs to price in the future as best possible. So far, Hewlett, Intel, and Microsoft have all said the same thing: there is a boom and bust cycle implicit in Y2K spending. I have to give credit to Microsoft for emphasizing this point. To reiterate, Microsoft's customers say they are replacing legacy systems in order to prepare for Y2K...this is reflected in the bottom line. But those same customers are planning on freezing spending later. In short, BOOM...BUST. I think the surprise might be that companies included the boosted spending in the 4th quarter of this year, instead of later. It then follows that the "bust" could occur sooner than expected. If we don't price in the "bust" now, we will have to price it in later against a higher stock price. It would be awful to face a year-over-year decline with a stock price at the current level. I think my thoughts are in line with Microsoft executives; I am long the stock and would like to sell at ever-higher prices, but there is a black hole in the future. ...on the other hand, most only care about what the stock opens at on Wednesday.