[LINK] Microsoft gets away with one

[David Lochrin]

At 07:26 PM 15-09-2002 +1000, Frank O'Connor wrote:

>The fundamentals for MS are good ... and I think that's what the 
>market price reflects. The share value has descended form unrealistic 
>highs, but there's a good case to be made that it's effectively 
>undervalued at the moment. I mean, just taking into account their 
>cash reserves, their valuation of other capital assets and the like 
>the share value could possibly be higher. I mean, if MS was 
>liquidated tomorrow ("Be still my beating heart!" says Rachel), 
>shareholders would probably get much more than the share price when 
>distributions were made.

   Dear old DEC always had huge cash reserves, from memory well over US$1B during the eighties, but cash and global assets didn't seem to help them when they started to go bad.  (I well remember how, as each product line was sold off, the management would issue bullish press releases about "reorientation" and "core business" and "bright prospects".)

   Share value is related to growth and/or dividend prospects, and a company which is perceived to have lost the plot will see its share price drop regardless of its cash reserves.  (But note, this is not financial advice!!!)

David Lochrin

=================================================
David Lochrin
+61 2 9363 1094
PGP public key available by mail to:    pgp-public-keys@keys.pgp.net
                                          subject:    GET David Lochrin
=================================================
----------
For Link list information see http://sunsite.anu.edu.au/link/