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

To: Jill who wrote (21054)	4/20/1999 10:13:00 PM
From: Maverick	Respond to of 74651

MSFT will rally ahead of 6/10 Office 2K release MICROSOFT CORP. (MSFT) 83 1/8: The MSFT earnings report gave us a sense of deja vu after last week's Intel (INTC) report. As always, the company beat estimates, reporting Q3 EPS of $0.35 vs an estimate of $0.32. The whisper range was $0.34-0.35, so this report offered no significant surprises on the bottom line. As with Intel, however, revenue growth was unimpressive, at 14.8% year/year, which was the second slowest year/year growth rate this decade. Also as with Intel, Microsoft issued cautious statements about future revenues, saying that "we remain guarded about growth in 1999, given the likelihood that organizations will lock down their systems infrastructures due to year 2000 concerns." Bulls will note that MSFT is always cautious about future prospects, but it is notable that their caution appears justified this time around, as revenue growth is indeed slowing. Still, it is hard to get too down on Microsoft, as there are plenty of encouraging trends as well. Sales of the database platform, SQL Server 7.0, are off to a great start, up 50% year/year. And Microsoft can also look ahead to top line boosts from Office 2000, which will be available in June, and of course Windows 2000, which is scheduled for release sometime next year. These new offerings have the potential to boost MSFT revenue growth back into the 20-30% range next year. We could see some near term softness in MSFT stock -- it is trading down 1 1/8 to 82 on Instinet -- but don't look for it to last long, as there will probably be a anticipatory rally ahead of the June 10 Office 2000 release.By Briefing.com

To: Jill who wrote (21054)	4/21/1999 8:11:00 AM
From: t2	Read Replies (2) \| Respond to of 74651

Jill, It is easy to see why short term call option buying is not the best strategy at this point. That is why I sold my May 80 calls yesterday. Instead, i had been buying leaps 2001 just like taxman. You avoid all the short term volatility which is just pure gambling. I say gambling because momentum investors were not willing to play the earnings release this quarter. It is like flipping a coin. I decided that i want to be able to capitalize on the increase in the stock which is certain (IMHO). However, short term it just like being in a casino. Going into January earnings was no gamble and was a pretty good time to try short term call options. Now is a great time for long term leaps 2001. For May calls--the risk was a bit too much. After all it is a risk vs. reward decision. On leaps 2001, the risk appears minimal in my opinion but the rewards look pretty good at this point. July call options might be great about one month prior to expiration simply due to the buildup due to the Office2k revenue in the quarter. Such a buildup could cause a huge run-up and make short term call option traders a lot of money. Another opportunity may arise if the stock heads down due to the trial. A drop down to mid 70s would signal a buy for the july calls. Otherwise you are better off waiting until mid June. That is why I have stuck to holding lots of shares along with some leaps.