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

To: Richie who wrote (18423)	3/21/1999 12:40:00 PM
From: blankmind	Read Replies (2) \| Respond to of 74651

Richie - you confirmed my "Buy & Hold" strategy for MSFT - No one can conclusively figure where MSFT is headed. - I bought MSFT just under $150; watched it run to $175; then down to 140's; now back up to $170... and the trend is up. And true "Holders" will do well. Traders may do well. - Also, it appears that MSFT won't go above the $150 mark without splitting. - Therefore, given the current stock price; and hopefully good earnings in the future; we might see another split soon.

To: Richie who wrote (18423)	3/21/1999 4:32:00 PM
From: Teflon	Respond to of 74651

Hey there Richie, nice work on the research. Though your numbers are accurate, you need to provide more information in order to help our Group interpret your results. For starters, though you are correct in your presentation of MSFT being down 2.2% the week leading up to the split on Friday after the close, 2/20/98, there is more information relating to the scene that week. First, though MSFT closed down on Tuesday the 17th (Market was closed on Monday, 16th) at 154 3/8 compared to Friday the 13th's close at 157 1/2, Tuesday's close (154 3/8) was the low closing price for the week leading up to the split. I'm not sure if there was bad news released over the long weekend, but it's a possibility. Regardless, Monday's close was the low for the week of 2/20/98 and therefor, on average, would represent the best day that week for people to buy MSFT shares. Another item to keep in mind regarding MSFT's latest split is the overall trading pattern of the stock leading up to the split. If you look at the weeks leading up to the 2/20/98 split and the most recent four weeks of trading you will notice the following weekly results: Split effective after close on Friday 2/20/98: Week of 1/30/98.....stock UP 11 from prior Friday's close Week of 2/6/98.....stock UP 9 from prior Friday's close Week of 2/13/98....stock DOWN 5/8 from prior Friday's close Week of 2/20/98....stock DOWN 2 3/8 from prior Friday's close Split effective after close on Friday 3/26/99: Week of 3/5/99.....stock UP 4 3/4 from prior Friday's close Week of 3/12/99....stock UP 5 1/4 from prior Friday's close Week of 3/19/99....stock UP 11 from prior Friday's close Week of 3/26/99....stock ??????? from prior Friday's close What does all this mean, you ask?? I believe that Presidents' Day last year (2/16/98) was a rough weekend for several reasons for MSFT, and the stock was hit hard over the weekend. Considering where the stock closed on Tuesday and then closed out the rest of the week, it trended up from Tuesday through Friday, 2/20/98. Lastly, and most important, consider the timing of the split this year vs. last. If you look at the trading history of MSFT during this period last year, you will notice the following: Trading history of MSFT leading up to 3/26/98: Week of 3/13/98....stock DOWN 3/16 from prior Friday's close Week of 3/20/98....stock DOWN 1/2 from prior Friday's close Week of 3/27/98....stock UP 6 from prior Friday's close ...a relatively stable if not slightly positive trading period for the stock as it starts to gain momentum heading towards earnings release. Moreover, without a split to help support MSFT during the cold days of February, the stock this year lost 12 1/4 points from Friday, 2/5/99 through Friday, 2/19/99. So what does the rest of this all mean? I think MSFT chose a much more favorable time frame for the split to take effect, especially considering its proximity to earnings. February is always a tough month for the stock (that's a separate analysis!!!!) and if anything, the split in 98 help keep the stock stable during a historically bad time for the stock. This year, however, we are seeing the split during a historically comfortable time for the stock, and therefor we are seeing the large gains of recent weeks. I fully anticipate this week to be very strong, barring any tech bombs that may be waiting to throw some speed bumps in the road. Teflon