Aces High Bulletin Board
General Forums => The O' Club => Topic started by: rpm on April 29, 2006, 03:19:02 AM
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NEW YORK/SEATTLE, April 28 (Reuters) - Shares in Microsoft Corp. slid more than 11 percent on Friday, their biggest drop in more than five years, after the software giant said earnings would be hurt by increased investments aimed at fending off rivals such as Google Inc.
The stock had its biggest single-day decline since November 2000, lopping about $32 billion off its $281 billion market capitalization and reducing the value of Chairman Bill Gates's stake by about $3 billion.
The move shocked Wall Street, which had hoped to benefit from the company's biggest product releases in years, with its Vista operating system and Office 2007 scheduled for January.
"This is a big disappointment in the short term," said Todd Lowenstein, a co-portfolio manager at HighMark Capital Management, where Microsoft shares comprise about 1.5 percent of a $500 million fund. "A lot of investors may have lost some patience, especially with the increased spending."
"If Microsoft can't get operating leverage when it's in its biggest product cycle ever (and customer interest is high), when can the company show leverage?" wrote Morgan Stanley analyst Mary Meeker.
Morgan Stanley and Lehman Brothers both cut Microsoft to an "equal weight" rating from "overweight." UBS, Credit Suisse and Banc of America Securities pared their price targets.
Microsoft shares closed down 11.38 percent, or $3.10, at $24.15 on Friday.
:O