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Technology Stocks : PSFT - 1999: The "Make-It-or-Break-It" Year? -- Ignore unavailable to you. Want to Upgrade?

To: Michael Burry who wrote (333)	3/27/1999 7:40:00 PM
From: Chuzzlewit	Respond to of 1274

IBM can't do it with PSFT What is the impediment? Presumably there is some legal basis. Perhaps it is the phony spinoff of MMTM (because it hasn't been an independent entity for the required period of time), in which case MMTM would need to reacquired by PSFT first. TTFN, CTC

To: Michael Burry who wrote (333)	3/27/1999 7:51:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 1274

Michael, if P/E ratios were that important you would never see stocks like AMZN or CMGI trading where they are now. Stocks trade solely on the basis of expectations of future earnings streams (free cash flow is better yet), long-term interest rates and general capital market sentiment. P/E is another one of those terribly flawed metrics which is used by the naive. The reason that PSFT traded at very high P/Es was because investors believed that a long period of hypergrowth lay in PSFT's future. The reason that the multiple has come down is that investors no longer share that vision of the future. If you recall, the first crack in PSFT's picture occurred last April, when, in spite of good earnings the percent of license revenues to total revenues began to fall. More recently we have seen a terrificv erosion of deferred revenues. Both of these are indicators of future earnings, and this is what market valuation is all about. TTFN, CTC