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

To: Sir Francis Drake who wrote (19603)	4/2/1999 9:06:00 PM
From: Deliveryman	Read Replies (1) \| Respond to of 74651

Oops, you assume the same number of shares outstanding. Do the math with MSFT starting to do stock buybacks. They have the cash, and will get good advice to do this. Oh Oh... suddenly if managed right, IT IS POSSIBLE! They haven't done stock buybacks yet, but so far there has been no reason to do so. MSFT uses the ever increasing stock price to buy companies, and hire the best people. They need the price of the stock to continue, and will do all they can legally to keep it in motion... No one needs it to double every year, every 18 months will be fine.

To: Sir Francis Drake who wrote (19603)	4/2/1999 9:23:00 PM
From: JP Sullivan	Read Replies (1) \| Respond to of 74651

MSFT's valuation does indeed appear to be a staggering sum -- more numbers than most computers know how to deal with! But what if you were to think of the company as several companies under one roof? Would that help alleviate your concerns? For years people have been toying with the idea that MSFT could be divided along its product lines, say OS, Productivity tools, consumer / home products, and now Internet services and products, and who knows, even banking and finance one day. I agree that it is not reasonable to expect the price of the stock to double every year. But I don't know if I can agree that the money will somehow "run out", as you seem to suggest, which implies that there is only a finite sum in existence. If I follow your reasoning, I would have to conclude that there can be no new companies entering the markets without lowering the market caps of existing companies or that no new wealth will be created from this point on, which is clearly not the case. You also argue that MSFT's valuation, assuming it appreciates at its current pace, would soon exceed the total capitalization of the US stock market. You would be right IF the total capitalization remained stagnant while MSFT kept on sky-rocketing and sucking money from other stocks into its dark-hole. Again, this goes back to the finite sum theory. What must the pioneers of the stock market be thinking of us now? I don't know what the capitalization of the Nasdaq was when it first came into existence, but could its founders have imagined the figures that exist today? Not if they believed there was only a finite sum of money available and that no new wealth would be created. Lastly, it seems to me that market capitalization is a notional beast, a phantom. No one actually plunked down $500 billion to buy MSFT. Sure, at its current valuation, a person wishing to acquire ALL of MSFT would have to cough up that sum. But this is not something that is likely to occur. It's a bit like everyone going to the bank and withdrawing every cent they have all at the same time. There would not be enough cash to go round, or put another way, "there simply isn't enough money in existence in this world." Therefore, to suggest that there is a limit to how high in terms of market capitalization a company like MSFT can grow would not be correct, IMHO. Winston

To: Sir Francis Drake who wrote (19603)	4/2/1999 9:39:00 PM
From: Harry Sharp	Read Replies (1) \| Respond to of 74651

You've put a lot more thought into your post than I've put into this - so I can't say that you are wrong. However one thing you've seem to have overlooked is that it will not take $500 Billion more dollars to double Microsoft's market cap. Consider that if there were virtually no sellers Monday but many buyers - say theoretically only 100 shares trade - further say those 100 shares double in price and sell for $180… then only $18,000 has moved Microsoft's market cap from $500,000,000 to one trillion dollars.

To: Sir Francis Drake who wrote (19603)	4/3/1999 2:15:00 AM
From: blankmind	Respond to of 74651

- yes - MSFT can have a 1, 2, or even a 100 Trillion $$ market cap - Why? - Because our financial system; and every other financial system we've ever had rests on sheer "confidence in the system" - I know this is scary. But think about it. The "paper supply" of money is actually remaining stable & even shrinking. - While the financial assets, e.g. real estate, stocks, bonds, etc.... is growing every year.

To: Sir Francis Drake who wrote (19603)	4/3/1999 3:30:00 AM
From: ed	Read Replies (3) \| Respond to of 74651

What are you smoking ? Microsoft just reorganize itself in five different subdivisions , you may look them as five different sub companies under the name of Microsoft , and all in different business. So, with a little math, if you divide the total 500B cap by 5 , you will get 100 B of cap for each of Microsoft sub divisions. And as time goes by, as more business opportunities comes to the horizon, more sub companies will be established within Microsoft, and and cap of each sub company of Microsoft will be smaller due two more sub companies will share the total caps of Microsoft, so , with smaller caps of each sub Microsoft company, each sub company will have more chance to grow in its respective business. and the posibillity that some sub Microsofts (Baby Microsofts) may spin off eventually. From another point, Say a company called ABC , which merge IBM, ORCL, SUNW,AOL, SEARS, HD together as one single company called ABC. The total cap of ABC will be at least 6 times of each the above companies, do you think ABC will have less growth than IBM, ORCL, SUNW, AOL, SEARS, HD , becase ABC's cap is much larger than the above individual company ? I do not think so, because ABC is involved in Harware, software , E-commerce, department business, and each business has its own market. Today's Microsoft is much more diversified, its in Software business, e-commerce business, department store business, pretty soon , it will be in Telecommunication business, banking/finance and hardware business ( I see Microsoft may buyout COMS, the Palm + Internet) .So even though Microsoft as a single giant Company , with its diversification and each baby Microsoft in different high growth market, I see the future growth is unlimited. The Market cap is not an issue at all. The money around the world can afford more Microsofts than you think !!!!!!!!!!!!