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Re: MSFT Down 11%: One-day, Double-digit Drop

__/ [ Geico Caveman ] on Friday 28 April 2006 18:19 \__

> L Leed wrote:
>> John A. Bailo wrote:
>>>e called it at 15 by EOY.
>> Unless the entire market does a meltdown, there is no way MSFT goes to
>> 15. They still have a monopoly on the desktop and a strong hold on
>> servers.
> Stock market value is an anticipation of future earnings - not the current
> state of affairs.


The investor ideally sells at the peak -- the pinnacle of success. From there
onwards, expectations are bound to go downhill. They can otherwise be
corrected and re-adjusted as to remain realistic and cease to disappoint, or
at worse lead to panic. In practical terms it could mean that:

* Microsoft come to grips with the inability to successfully compete against
Google's services

* Desktop monopoly is assumed to be lost owing to a migration to Web services

* Server sales might be profitable, but UNIX houses choose Linux, which grows
tremendously fast in the back room

* Office is no longer the cash cow it once was

Have a look at some of the recent news that is coming from the East.
Microsoft try to get their 'profits rebound' by reclaiming lost licenses
where piracy prevails.


   [ China and Microsoft talk piracy and promises ]

No wonder:


   [ Linux Set to Soar in China ]

> On desktop and on servers, Microsoft has been slowly losing market share
> over the last few years. Vista's release problems do not help add much to
> all that. No, I do not think that 15 is a realistic end result (at least
> right now), but it does seem to be headed down finally, after being
> becalmed for years.

It's the profit warnings and decline that led to after-hour disposal of the
stock. Let's not forget the EC hearings -- those which will most likely lead
to a daily fine and a mockery associated the brand's reputation

Other recent factors: Office release delay, Vista release delay, executives
defect to other companies, managerial restructuring, negative product
reviews, usage of MSN search dropping from 14% to 11% in just one quarter
despite promising promises (twice!), governments stealthily migrating to
Linux and so forth.

When was the last time Microsoft had exciting announcements to make? The Treo
700w is the most recent I can think of (it reached the microsoft.com front
page), but ever since, Palm officially moved to Linux, which is their one
and only vocation. FUD campaigns and a variety of publicity stunts (e.g.
GoDaddy parked domains, 'independent studies') have thus far been the only

Best wishes,


Roy S. Schestowitz      |    Useless fact: 21978 x 4 = 21978 backwards
http://Schestowitz.com  |    SuSE Linux     ¦     PGP-Key: 0x74572E8E
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