Tom

I was looking at stocks today and saw the market had a drop-off (like that's
new) and MS was one of the blue-chip components in the cause of the drop;
Here is an excerpt from the article (from MSN Money ironically).

http://articles.moneycentral.msn.com..._blg=1,1812280

Microsoft is hit with a downgrade

Microsoft was down 1.9% to $23.91 after Goldman Sachs downgraded the stock
from "buy" to "neutral." The stock is down more than 21% this year.

Goldman analyst Sarah Friar wants to see Microsoft boost its dividend again
to produce a 5% yield. That would suggest the dividend should be around 32
cents a quarter. Microsoft recently boosted the dividend from 13 cents to 16
cents.

Friar also wants a more coherent strategy for its consumer businesses. One
proposal: Spin off its Xbox business.

And her note suggested that Microsoft should expand its investment in cloud
computing.

So far, she wrote, Microsoft has not answered threats from smart phones and
tablet computers, "which threaten to encroach on its highly profitable
Windows franchise."

Doug Jacobs

Tom <noway@nothere.com> wrote:
> Microsoft was down 1.9% to $23.91 after Goldman Sachs downgraded the stock
> from "buy" to "neutral." The stock is down more than 21% this year.

Yeah, because having billions of dollars in cash in the bank, and a very
fast selling software product is a sure sign of a company that's a bad
investment. Honestly, I can't think of many other companies - tech or not
- that wouldn't KILL for the numbers Microsoft has. Yet because some dimwit
at a bank doesn't get it, the rating is lowered causing the stock price to
go down which in turn takes the whole market with it.

Honestly the stock exchange is nothing but a self fulfilling prophecy. All
it takes is for an investment bank to drop your rating, and the rest of the
market follows along.

> proposal: Spin off its Xbox business.

The only reason she's suggesting this is because the losses from the Xbox
department are a drain on Microsoft's twin cash cows - Windows and
Office. I know that the 360 has earned enough money cover its own
development and initial start-up costs, but has it earned enough to
erradicate the red ink from the initial Xbox? Spinning off the Xbox as
its own company would result in Microsoft's finances looking better on
paper because they've effectively taken the gaping maw that is game
console development, and hidden it on another page.

What's stupid here is that spinning off the Xbox (or other so-called
unprofitable business units) wouldn't really change anything - Microsoft
would still be using its massive revenues from its desktop software
products to fund the Xbox. The only difference is that now the money
spent for the Xbox becomes an "investment" as opposed to an "expense".

> And her note suggested that Microsoft should expand its investment in cloud
> computing.

This, by far, was the only sensible suggestion she made.

> So far, she wrote, Microsoft has not answered threats from smart phones and
> tablet computers, "which threaten to encroach on its highly profitable
> Windows franchise."

"answered threats from..."
Smart phones - they have a version of WinCE for phones - and it's
been around a lot longer than the term "smart phone" has.

Tablet computers - um... Tablet computers have been around for over a
decade - and they all ran Windows up until just a few years ago when you
started seeing Linux on a few models, not to mention the iPad.

And people wonder how we got into the current financial mess. Well,
here's one big problem - the people responsible for the big investments
don't know squat about the companies or industries they're actually
investing in.

--
It's not broken. It's...advanced.

Tom

"Doug Jacobs" <djacobs@rawbw.com> wrote in message
news:mvCdnQbz-ZA4BDbRnZ2dnUVZ_vydnZ2d@posted.rawbandwidth...
> Tom <noway@nothere.com> wrote:
>> Microsoft was down 1.9% to $23.91 after Goldman Sachs downgraded the
>> stock
>> from "buy" to "neutral." The stock is down more than 21% this year.
>
> Yeah, because having billions of dollars in cash in the bank, and a very
> fast selling software product is a sure sign of a company that's a bad
> investment. Honestly, I can't think of many other companies - tech or not
> - that wouldn't KILL for the numbers Microsoft has. Yet because some
> dimwit
> at a bank doesn't get it, the rating is lowered causing the stock price to
> go down which in turn takes the whole market with it.
>
> Honestly the stock exchange is nothing but a self fulfilling prophecy.
> All
> it takes is for an investment bank to drop your rating, and the rest of
> the
> market follows along.
>
>> proposal: Spin off its Xbox business.
>
> The only reason she's suggesting this is because the losses from the Xbox
> department are a drain on Microsoft's twin cash cows - Windows and
> Office. I know that the 360 has earned enough money cover its own
> development and initial start-up costs, but has it earned enough to
> erradicate the red ink from the initial Xbox? Spinning off the Xbox as
> its own company would result in Microsoft's finances looking better on
> paper because they've effectively taken the gaping maw that is game
> console development, and hidden it on another page.
>
> What's stupid here is that spinning off the Xbox (or other so-called
> unprofitable business units) wouldn't really change anything - Microsoft
> would still be using its massive revenues from its desktop software
> products to fund the Xbox. The only difference is that now the money
> spent for the Xbox becomes an "investment" as opposed to an "expense".
>
>> And her note suggested that Microsoft should expand its investment in
>> cloud
>> computing.
>
> This, by far, was the only sensible suggestion she made.

I suggest you learn a little more how the stock market works. Xbox is not a
drain as I stated to you in a previous post. They would sell it to increase
market value of MS overall. The complaint isn't about MS' profits, they are
good, nor are there people not wishing they weren't in the position MS is in
when concerning cash on hand. The problem is, that MS, nearly since the end
of the dot com bust has been stagnant. IOWs, pulling in 10-20% profits every
year isn't enough as their stock value is basically static and newer
investors are not willing to buy a solid stock if it isn't going to grow in
value. Most shareholder in MS are one that have been with them for a long
time, they are not selling much now and living on the dividend they earned
when the company profits were off the charts..

>
>> So far, she wrote, Microsoft has not answered threats from smart phones
>> and
>> tablet computers, "which threaten to encroach on its highly profitable
>> Windows franchise."
>
> "answered threats from..."
> Smart phones - they have a version of WinCE for phones - and it's
> been around a lot longer than the term "smart phone" has.
>
> Tablet computers - um... Tablet computers have been around for over a
> decade - and they all ran Windows up until just a few years ago when you
> started seeing Linux on a few models, not to mention the iPad.
>
> And people wonder how we got into the current financial mess. Well,
> here's one big problem - the people responsible for the big investments
> don't know squat about the companies or industries they're actually
> investing in.

The mess we're in has nothing to do with MS.