Well the judge has ruled and MSFT broke the law.TMF Otter's article on "When to sell" could not have been more timely. He writes that the number one reason to sell a company is when the management is involved in deceptive or illegal practices. To quote, "We will not tolerate deceit from management. In fact, a company violating this standard is an outright sell." He goes on to say that "We need not see the management break the law to determine that they are crooked." One can assume that if they are actually found guilty they've pretty much got a seat reserved in Fool Hell. In fact, I think it would be safe to say that MSFT "...is a classic case of a company that used aggressive (and as it turns out, potentially illegal) ... methodology ..." to achieve and maintain a monopoly.Or does the rule only count when we are the victims?E.
Well the judge has ruled and MSFT broke the law.That was pretty much a given since the 'finding of fact' a while back. Now is the penalty phase (in this case, break up the company). Then comes the appeal phase..."We will not tolerate deceit from management. In fact, a company violating this standard is an outright sell."I would say Otter nailed that one. I agree. I often regretted not getting MSFT a few years ago when I first started watching them. This was pre-Fool (for me) and I was concerned that their PE was not sustainable. Damn if they didn't sustain! Today I would not touch the company for anything, primarily because I agree with the above quote. But also because there is too much uncertainty in the company now. Very scary from an investing standpoint, IMHO. If I were an RM manager I would sell this one (in fact I would have done so shortly after the finding of fact).1poorguy's opinion
When I first heard of the inner-office emails and memos laying out illicit plans to conquer the businesses who would dare to contest the giant MSFT, it was time for me to sell. I did. I would like to believe that I would do the same with the stock of any company I found to be dishonest, underhanded, or using unacceptable accounting procedures. Size, volume, earnings - none of this should matter when considering the morality of the management leading a company.
I think it would be safe to say that MSFT "...is a classic case of a company that used aggressive (and as it turns out, potentially illegal) ... methodology ..." Your term - potentially illegal - It appears that after this kangaroo court, nobody is convinced that MS used illegal practices. The rule counts, but in this case the stockholders are the victims.
If you feel Microsoft lied, mislead, and took advantage of you as a shareholder, as an owner of the company, you should sell. My company was trying to gain a monopoly position in it's market. I do not feel my company lied to me. If I'm wrong, showme.
First, some disclosure. I am long MSFT and have no plans whatsoever to sell.I may be wrong, but I would be shocked if the RM managers sell Microsoft. I believe that they will hold on to their shares for the following reasons:First, even though the judge has ruled, I still believe that whether or not MSFT was deceitful and underhanded is a matter of opinion. As far as I know they never literally broke the legs of any person or competitor. Were they aggressive in trying to eliminate their competitors? Yes, they were. Would most any company in America, if given the same opportunities as Microsoft, have played the game the same way? From where I sit, yes they would. We can debate this all night long, but MSFT does not stand alone in the line of companies who compete as aggressively as they can get away with.The second reason to hold your shares is that, historically, the remnants of companies broken up by antitrust (e.g. Standard Oil, AT&T), have fared quite well for investors. Holding the shares has usually been profitable.In my mind, I'm not ready to throw in the towel on Microsoft's management just because Thomas Penfield Jackson says I should. In fact, I look at it in just the opposite way. MSFT's managers did their job TOO WELL. So well that the government had to step in and change the rules of the game for them.Not that breaking up the company won't be good for competition, stimulate innovation, and all that good stuff. In fact, I think it will. But that's not what I bought when I bought my shares of MSFT. I bought the opportunity to maximize my investment, nothing more and nothing less. I think that's still possible and I won't be selling under the existing set of circumstances.My purpose with this post is not to irritate anyone or cause undue debate over Microsoft's morality. I'm just stating my opinion on the issue.powerfade
Now is a great time to buy MSFT. The judge in question has previously had a biased (tainted)opinion against MSFT. Upon review by other courts, MSFT will not be broken into two or three companies. MSFT leveraging is used by every major retail company to retain or gain advantage over competition. I was in furniture business and larger companies (most) had restrictions on who the salesperson could offer his wares to. We prospered anyway because there were other sources. But, business was never intended to be "friendly" with competition. MSFT will be a great company five-10 years from now.
Your term - potentially illegal - It appears that after this kangaroo court, nobody is convinced that MS used illegal practices. Just about all people who are technically literate and not dependant on Microsoft consider that the court case was NOT a Kangaroo court but a place where some pretty damning evidence of MSFT's illegal activity was presented. On the evidence (emails, depositions, witness quesions...) for someone to NOT rule that MSFT was illegally aggressive in its tactics against potential threats would be incredible.While I don't agree with the remedy I absolutely agree with the finding of Fact and finding of Law. This is a classic case of a monopoly blatently disregarding the interests of anyone else, the law, and just about everything.I have never owned MSFT mostly because I could never bring myself to buy a company with such a cavalier regard for the rights of others. Some excellent commentary on the trial can be found at http://www.pbs.org/cringely/index.html and http://www.zdnet.com/zdnn/ - in the later look for past articles by Mary Jo Foley in particular.DD
I would just say that I wouldn't sell Microsoft just because of a guilty verdict until all appeals are settled. If I thought they were dishonest, regardless of the verdict, then I'd sell (or probably would have sold already). Of course, since I don't own MSFT, I don't have to make the decision.FoolRM
My purpose with this post is not to irritate anyone or cause undue debate over Microsoft's moralityOk, let's put aside the morality issue.MSFT's managers did their job TOO WELL. So well that the government had to step in and change the rules of the game for them.The rules of the game were NOT changed. They've been there before Gates was born. The managers did NOT do their job well-they were stupid and did a POOR job. The rules were there and they violated them. They also tried to cover up their violations which was really STUPID (leaving out the morality issue).There was another post on this board that said that the ones getting screwed are the MSFT shareholders. This is faulty thinking. MSFT shareholders elected the management of the company. If the company is well managed and does well, the shareholders benefit. If the management is stupid and the company suffers, the shareholders suffer. There is no difference between making a bad business decision by management (look at MCK's acquisition of HBOC) or this case. You suffer with mismanagement. Moral of the story: don't have your money in companies with management you don't like, can't trust or have believe won't perform well. Your investment is in management's hands.
It appears that after this kangaroo court, nobody is convinced that MS used illegal practicesWho is "nobody"? Does he post to this board?I'm convinced. I've been convinced for ten years. The authors of DR-DOS (and the Justice in that case) are convinced. The authors of Doublespace are probably convinced (but they got crushed like bugs so we'll never know). Most of the staff at Apple are probably pretty close to being convinced. I bet it wouldn't be hard to convince the crew at Netscape. Do you think that Sun and all the people trying so hard to keep Java open to everyone are convinced? Ask anyone who has tried to program in windows without paying their tithe to the Church of MSDN...they're probably convinced.If you think I am singling out MSFTs competition, look again. Each of these companies (with the exception of Caldera) developed a major innovation in the industry and carved a niche for itself. In each, MSFT saw that niche and coveted it. Ask yourself, if Netscape had not had a chance to develop its product, would you be using IE today? E.
If I wasn't so polite I'd say cut the morality crap. There are moral investing boards for that. If you own a company, a RULEMAKER for heaven's sake, you want it to dominate it's market. Microsoft tried to do that. Did they lie to you? Of course not. Microsoft has always been up front about their win-at-all-costs philosophy. MS fullfilled their part of the bargin. No matter what the appeals court says, the issue now is will the resulting company (or companies) remain powerful Rulemakers or Rulemakers-to-be? If you think yes and have the stock already, you ought be considering buying more while it is on sale (downside risk is low as the worst has been factored into this stock). If you think MS (or the baby Bills) is no longer worthy of RM status, sell. If you don't own MS and wouldn't consider buying it anyway, buzz off, you're not part of this equation. glh
I will be buying more and Holding what I own Mirosoft did not lie to me. But when I was an apple user only I liked the software and hated the company now that I own both systems and three machines two using windows I think different.hang in there.
TrumpCoupTimmy wrote:Moral of the story: don't have your money in companies with management you don't like, can't trust or have believe won't perform well. Your investment is in management's hands.Just curious, Timmy, do you own MSFT or have you ever? I'm still not convinced that my investment will, in the long run, turn out to be a bad one.powerfade
horacekgl,THANK YOU, and amen. I couldn't agree with you more.powerfade
Powerfade-Just curious, Timmy, do you own MSFT or have you ever? I'm still not convinced that my investment will, in the long run, turn out to be a bad one.I'm happy to provide a voluntary disclosure of my holdings of MSFT. I have no reason to be dishonest about it although TMF's may not totally approve. When MSFT took the big hit down to the sixties, I took my first ever position in the company. I bought the January 2001 70 LEAPs (options) which were at that time (if I remember correctly) ZMQAN. I have not sold them and still maintain the same position. The symbol has changed to MSQAN to merge in with the regular call options.For those who are lost by the above, it is to my financial advantage for MSFT to increase as much as possible in price between now and the third Friday of next January although I may (and probably will) sell these options to close before that and be back to no interest financially whatsoever in MSFT.Probably more than you wanted to know but I have nothing to hide.
horace,Thank you for your post. I think you cut to the nub of the question: Is the mere fact of criminal wrongdoing in the eyes of the courts sufficient reason to sell a rulemaker or do we take it upon ourselves to decide what is fair and reasonable? If we hold the latter case to be true, I would highly recommend the RM port open themselves to foreign investments. I am sure there are a number of extremely profitable businesses operating in developing nations which would be happy to give us a very significant return on investment as long as we are willing to adopt their position on what should be legal. I am not in any way trying to discourage YOU from making your own investment decisions. You have made no public statement regarding your ethical standards. What I am suggesting is that the RM port has a publically stated position on criminal wrongdoing.As for my position on MSFT--I hold a few shares as an exercise in applied cynicism. I am firmly of the opinion that the split will occur but that by the time it does, the structure of the ruling and of the organization will have been tuned sufficiently that the sheep will get sheared in the process. My intent is to apply this belief and my opinion on how this will be executed and see if I don't end up with a little wool myself.E.
I am interested in this one. I have freinds who work at MSFT, have read the media stuff and the discussion board material as well. Several things: FirstlyIt is speculation that they broke the law - as with many court cases it is spin doctoring that wins where issues are 'gray' as in this case.Secondly it came about because a few other whiny CEOs couldn't be the biggest boys in the sandbox so they had to get the US Gov't to do it for them. The consumer was not the plaintif - rather self interested parties who used their own bully techniques to gain advantage.Thirdly, it is doubtful we will ever know the real nature of any illegal activities (if there were any)sicne it is not as obvious as say an environmental spill that decimates a coastline. It likely can never be proven beyond reaonable dooubt.That said, I think MSFT should stay in, and like in the past, it will do well, rise to the occassion, adn fight the next round strenuously. Besides, the tax payer will somehow get the legal bill in the end, I'm sure.
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