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No. of Recommendations: 3
I realise that most people are more focused on finding emerging gorilla candidates, so very little is said about the end of gorillahood for a company.

I loaned my book to a colleague and it looks like I might not get it back. I'd like to re-read what Moore has to say about the end-of-life gorillas.

For instance, Microsoft, if you look at there last
4 quarters, you see earnings of:

$0.38 for the quarter ending 9/99
$0.47 for 12/99
$0.43 for 3/00
$0.44 for 6/00

with estimates for:

$0.41 for 9/00 (paltry 8.95% y/y growth rate)
$0.49 for 12/00 (even worse 4.82% y/y)

Sales are 23.0 billion (ttm) with margins of 47%
which is, ofcourse, pretty good.

PE/G averages at 6.5 which is not so good.

Market cap is 365.1 billion @70 1/4 p/share.

And price/sales of 16.73


By comparison, if your look at GM and their last 4 Q's:

$1.33 for 9/99
$1.86 for 12/99
$2.80 for 3/00
$2.93 for 6/00

with estimates for:

$1.57 for 9/00 (not-too-shabby 18.31% y/y growth)
$2.52 for 12/00 (even better 35.36% y/y growth)

Sales of $184.7 billion (over 8x those of MSFT)
However, skimpy margins of 4.8%

PE/G is 0.27! (versus MSFT @ 6.5!)

Market cap is 36.3 billion (1/10th that of MSFT with
sales 8x greater)

Finally Price/sales of 0.2! at 18-35% growth!


My question is, how long can/will people keep paying this sort of premium for this gorilla-on-the-wane?

Is it just margins? I realise they're good, but the growth is slamming to a halt.

Wondering at the elusive power of the Gorilla

Tim
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