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

To: Richie who wrote (19015)	3/27/1999 10:43:00 AM
From: t2	Read Replies (1) \| Respond to of 74651

Richie, This might be the article . seattletimes.com Posted at 11:23 p.m. PST; Saturday, March 27, 1999 Judge OKs Microsoft bid to query Netscape, AOL execs by James V. Grimaldi Seattle Times Washington bureau WASHINGTON - A federal judge has granted Microsoft permission to question three executives involved in the America Online-Netscape merger, leaving open the possibility that AOL Chairman Steve Case could become the next high-profile witness to crop up in the landmark antitrust trial, sources close to the case said. In granting three depositions, U.S. District Judge Thomas Penfield Jackson yesterday rejected Microsoft's request to spend up to 35 hours questioning seven witnesses from AOL, Netscape, Sun Microsystems and the investment bankers who handled the deal. Jackson said one witness from each company could be questioned. He made the decision during a conference call with the attorneys in the case, the sources said. During the five months of trial, which is on a break, Jackson has specifically asked whether Case would be questioned and has expressed particular interest in AOL's acquisition of Netscape and the strategic alliance made with Sun Microsystems as part of the deal. The questioning would take place in a deposition outside the courtroom, but under a ruling by the U.S. Court of Appeals in Washington, the deposition would be open to the public. Most of the high-profile depositions, including that of Microsoft Chairman Bill Gates, have been played on videotape during the trial. The decision was an important victory for Microsoft: The Redmond software giant has contended that the deal demonstrated that the antitrust case was irrelevant and proved the marketplace was thriving without the government's lawsuit. The government, in a filing with the court this week, said Microsoft was attempting to "blow far out of any proper proportions" the significance of the deal. The Department of Justice opposed the depositions as "excessive and unnecessary" and "likely to interfere with the parties' ongoing preparations to resume the rebuttal phase of the trial of this case." The trial is on break following the completion of the government's and Microsoft's cases. Both sides must tell the judge this week who they propose as rebuttal witnesses. The trial is not set to resume until sometime in May. Copyright © 1999 Seattle Times Company

To: Richie who wrote (19015)	3/27/1999 4:22:00 PM
From: gridiron 99	Read Replies (1) \| Respond to of 74651

That's the right link to the article. I have no idea why it fails to take you there. You can do this. Go to: seattletimes.com That is the main site of the Seattle Times, and go to business and search for the article. I also have the print copy of the Times. If I have time this evening, I will type the entire article, and post it on this board. It's a good story.

To: Richie who wrote (19015)	3/27/1999 5:51:00 PM
From: gridiron 99	Read Replies (3) \| Respond to of 74651

Here is the entire article on MSFT that I am typing from my print copy of the Times (Friday 3/26). STILL BULLLISH ON MICROSOFT. By JAMES ROWLEY Bloomberg News WASHINGTON-Whether Microsoft settles its antitrust battle with the government or a judge decides the outcome, investors have rendered their verdict: Buy Microsoft. Investors who bought the software giant's shares May 18 - the day state and federal officials filed their landmark case - have more than doubled their money. The combination of soaring profits and the popularity of technology stocks drove Microsoft's shares to an all-time high of $179.938 yesterday from $86.063 May 18, a rally that preceded a 2-for-1 split that takes effect Monday. "Investors have been shown the money, and that's what they are going to focus on until proven otherwise," said Brett Berry, a money manager with Bailard, Biehl & Kaiser of San Mateo, California, which owns 114,508 shares of Microsoft. Even if Microsoft loses the case, analysts don't expect the judge to break up the company or impose a sanction that would seriously interfere with the company's business. Lengthy appeal that could take the case all the way to the Supreme Court are likely to delay implementation of any remedy for several years. And profits are expected to keep growing, helped by the successful marketing of networking software for business and development of new products for hand-held computing devices, set-top boxes for televisions and Internet commerce. This week, all the talk was of settlement. Microsoft submitted a proposal, and company representatives will sit down Tuesday to discuss it with lawyers for the Justice Department and the 19 states that sued the software giant. While government officials were skeptical, eager investors yesterday pushed the stock up 5 percent, or $8.688 to a record. The stock could take a short-term hit if U.S. District Judge Thomas Penfield Jackson decides Microsoft violated antitrust laws, prompting investors to pay closer attention to news about possible sanctions, analysts said. In any event, "Wall Street doesn't see a Draconian remedy coming out of the case," said Robert Finch, a portfolio manager with Aeltus Investment Management, which owns 4.8 million shares of Microsoft. To be sure, the stock's February slide along with other technology stocks is a reminder that the sky may not be the limit. After the shares rose above $175 in January, they tumbled to 145.75 in mid-February amid concern the stock was overvalued. The stock has climbed steadily this month. Optimism that Microsoft will be able to resolve its legal fight helped lift the share price to equivalent of 70 times its earnings during the past 12 months. The ratio is the highest it has been since at least mid-1990, and almost double its average of 36.5 times earnings during that time. INVESTOR REMAIN BULLISH Investors weren't deterred as the trial, now in recess, yielded negative publicity for the company and Chairman Bill Gates. Accused of bullying rivals, Microsoft has steadfastly denied it is a monopolist although its Windows operating system runs more than 90 percent of the world's personal computers. On the strength of its earnings, Microsoft jumped 10 percent one day at the start of the trial, the same day the government asserted that video tapes of Gates had shaken his credibility. The stock rose 4.5 percent on Jan. 20, the day Microsoft announced a 75 percent increase in fourth-quarter profit over the same period the previous year. Revenue rose 38 percent to $4.94 billion in the quarter ended Dec. 31. Its market capitalization has since reached a record $454 billion. Even if Microsoft loses in court, investors are betting that "whatever the remedy is, it's not going to tie their hands in such a way they are not going to be able to invest in the enormous opportunities in front of them," Finch said. Any court-remedy could be delayed for years. "In the meantime, the company is doing very well," Berry said. Individual investors have helped spurred the rise in the stock because "there are a lot of positive vibes coming out of Microsoft. Retail investors thrive on that," said John Puricelli, an analyst at A.G. Edwards & Sons in St. Louis. Although Microsoft regards the antitrust trial as a high-stakes battle, its counsel, William Neukom, frequently tells reporters that what happens in the courtroom represents only a "small slice" of the life of a big corporation. Witnesses called by the company are trying to convince Jackson that Microsoft faces "dynamic competition" from many quarters in fast-paced computer industry and doesn't exercise monopoly power. To dispel the government's argument that Microsoft controls the operating-software market and the pace of innovation, officials say the company is seeking new ways to captitalize on the explosive growth of the Internet and high-speed transmission of electronic data. Microsoft's plan to develop Windows CE operation software for hand-held computers and other "information appliances" like set-top boxes for televisions, also fuel expectations the company will profit from the next wave of the computer revolution. Microsoft also has sucessfully positioned itself as a major supplier of software for network computers for big companies. PLENTY OF NEW PRODUCTS "It's the first time in the company's history they have had so many new products," Berry said. "They have done a very good job of taking market share from competitors." Investors also shrug off the chances the company will lose market shares to upstart competitors. "The risk to them of being overrun by somebody else's technology doesn't appear to be that great," Finch said.