25 Could Microsoft's Stock Double in Price << Prev Next >>
by: ColonelZen	IP: 101.146	rated: 0-0	posted: 2008-08-23 16:54:36
Originally at: http://www.ip-wars.net/story/2005/12/12/225031/87     Could Microsoft's Stock Double in Price?     By ColonelZen, Section Microsoft Related Articles   Posted on Tue Dec 13th, 2005 at 21:35:02 EST   Someone, by all appearance either a shill or troll on the Y! MSFT board posted that they had invested with the expectation of the stock doubling in a five year timeframe. This, adding some minor edits, was my response.     Re: Question, So I just invested $35K i   by: ColonelZen 12/12/05 10:35 pm   Msg: 1060848 of 1060848     I sometimes lurk and occasionally post (Y! MSFT board) here but sometimes hit "Strong Sell" by accident as where I more frequently hang out, it's the appropriate sentiment. The reality is I don't really have a sentiment towards MS as an investment. It may go up, perhaps 25% in any one year; shrug. I suspect - but don't know - that over the long term it will go down.     To clarify my status, I know nothing about the stock market and investing - this is not advice, just casual babble offered for your amusement. I do know a little bit about the technology, though so here and there that babble may have brief tenuous connections to reality.     I think a doubling in 5 yr is remotely possible but there is no reason to believe it will happen.     MS's cash flow and profitability come almost exclusively from Windows and Office. Both markets are saturated. That MS already has reacted econommically to Linux and OpenOffice is evidence that they know they do not have total market control. But the market is saturated and they know that they cannot force their customers to churn product at their whim.     To be sure most of their current customers will likely continue to see MS products as superior for their needs for the 2-3 year window and probably a near majority in the 5yr timeframe. The problem is that they are not competing with a similarly priced competitor, but with a zero priced competitor. And the TCO studies funded by MS are clearly stacked in MS's favor; certainly there are many instances where MS is still the "right" economic answer today, and likely for the next upgrade cycle; but it is nowhere nearly as universal a truth as MS wants the corporate world to believe - and the corporate world is becoming more aware of that with every article and whisper of Linux and OpenOffice. And the situations where it is either clearly or marginally true are becoming less frequent as more of the workforce gains experience with Linux and OO.     Absent a release of spectacularly successful new technologies (no, what's been hyped about Vista isn't) there is no possibility of the Windows and Office markets supporting a doubling of the value of MS as a corporation.     That huge cash box MS is sitting on theoretically could be a force rapidly augmenting MS's capital value ... IF (big IF!) MS developed skill as a high tech investment/incubator company. But historically MS has shown no evidence of talent in that direction despite several attempts.     In short, I dont see it happening.     A medium term investment in MS ahead of the Vista release might be a successful play. I seem to recall reading that MS always has gone up following release of a new version of the OS. But I'd say even that's rather risky - in the past there was no significant potential threat; now there is given how well and widely Linux is now entrenched and the growing awareness of OpenOffice.     -- TWZ