__/ [ BearItAll ] on Friday 15 September 2006 12:58 \__
> Roy Schestowitz wrote:
>
>> __/ [ Mark Kent ] on Friday 15 September 2006 08:59 \__
>>
>>> begin oe_protect.scr
>>> BearItAll <spam@xxxxxxxxxxxxx> espoused:
>>>
>>> <snip on the reasons for FOSS's continued growth>
>>>>
>>>>
>>>> <snip />
>>
>> Turning "Dead Money" Into Gold
>>
>> ,----[ Quote ]
>> | Dead money? Isn't a new computer upgrade cycle on the horizon with
>> | Microsoft's impending release of its next-generation operating system
>> | for PCs, Windows Vista? Not to mention Office 2007 and Windows Server
>> | (codenamed Longhorn)? Yes. Did I forget about Microsoft's very promising
>> | Web 2.0 and .NET platform initiatives? Or about its recent decision to
>> | buy back 155 million shares from investors via a Dutch self-tender offer
>> | for $24.75 each?
>> |
>> | Investors punish Microsoft
>> |
>> | No. Despite these things, I still feel that Microsoft is dead money over
>> | the next four or so months because of residual investor ill-will
>> | surrounding the company's disastrous first-quarter earnings report back
>> | in late April.
>> |
>> | As you may recall, Microsoft dropped a bombshell on the investment
>> | community when it revealed its plans to spend an additional -- and
>> | unexpected -- $2 billion on vague advertising-related Internet
>> | initiatives in its fiscal 2007. The revelation meant the Street's margin
>> | and earnings estimates for next year were too high.
>> |
>> | This was on top of the company's earlier revelation that its Windows
>> | Vista operating system launch would be delayed from November 2006 to
>> | January 2007, thus missing the crucial Christmas selling season. The
>> | badn ews was too much for investors.
>> |
>> | The stock tanked 11.3% in a single day, the largest one-day percentage
>> | drop in at least five years. The stock has meandered since then and
>> | hasn't been helped by the recent prediction of the Gartner research
>> | firmt hat the Vista release will be delayed even past January into the
>> | second quarter of 2007.
>> |
>> | Microsoft is still dead money
>> |
>> | Simply put, this stock ain't going anywhere. The company's $14 billion
>> | to $15 billion in sustainable annual free cash flow, its 20% annual
>> | earnings growth, and its 20 P/E ratio arguably provides a solid price
>> | floor below the stock at right around its current price of $27, but the
>> | product delays and uncertainty over the cost-effectiveness of the
>> | company's massive new spending plans means it probably won't go up much,
>> | either.
>> |
>> | Buying the stock now is, in my humble opinion, not an option (pun
>> | intended).
>> `----
>>
>> http://biz.yahoo.com/fool/060914/115826023513.html?.v=3
>>
>> Microsoft is said to be dead money. Only Microsoft is buying (its own)
>> stocks. Because it can; and because it gives a bogus positive impression.
>>
>>
>>>> <snip />
>>
>
> I'm sorry to see Intel on the list of dead money companies. I really don't
> know what got in to Intel, why they held back and lost out in the 64bit
> market. Why they were so quiet about it when they did eventualy realise
> that 64bit wasn't only for servers.
>
> All those years when other PC chip designers had no real choice but to wait
> to see what Intel did next then emmulate it. That has been lost now.
>
> Intel still have the biggest overall sales, but a fall of 28% reported this
> January on http://uk.theinquirer.net while IBM continues to grow.
Don't get me wrong, Bear. I don't loathe Intel, but the banding of several
giants and their operation which is intended to preserve a status-quo (a
money-milking machine as a top priority) while locking others out is a peril
to science and engineering, as well as the customer who pays higher prices,
gets less choice, and gets less value. The Windows-Intel idiocy cannot
stand. And if you think that I am prejudiced about Intel, I'll have you know
that my sister's boyfriend works at Intel, so have been sending her E-mails
when I spotted potential problems in that company. She says his bosses like
him and appreciate his contributions, so he should be on the safe side for
now. Still, it's not an immortal IBM, so a safe path to retirement is hard
to forecast.
A demise of a Windows/Intel/Dell/etc liaison will serve as an important
(computer) historical lesson, so history will not repeat itself. Attempting
to suppress evolution in the market leads to a quiet rise of novelty, with
which you can only play catch-up. This is true not only in the context of
chips (AMD), but also operating systems. Think Monad (CLI), tabbed browsing
in IE7, 64-bit applications, eye candy and so forth.
Best wishes,
Roy
--
Roy S. Schestowitz | "Seeing bad movies only encourages them"
http://Schestowitz.com | Open Prospects ¦ PGP-Key: 0x74572E8E
Tasks: 141 total, 1 running, 138 sleeping, 0 stopped, 2 zombie
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