Posted on 05/03/2008 5:07:37 PM PDT by HAL9000
I seem to recall someone said the same thing when Yahoo first rejected the Microsoft offer. Guess what? Yahoo’s stock went UP the following Monday.
I think I read that the Yahoo board was “on-board” with the merger, and it was management that was not. Also, MS should be able to pick up stk on the open market at a lower price than they offered. I feel the majority of stk hldrs knows that if MS really walks away, then Yahoo’s time as a single entity is short.
“Many of those “sales” were coupon giveaways, and a lot of the “sold” copies get uninstalled and replaced with XP.”
Uh huh, I know that “line” too. It’s funny how no one has actual numbers, just stuff they read on a messageboard or stuff their friends told them.
“The sales that they are making are mostly for replacements, not new customers like Apple is taking from Microsoft.”
Yeah, ok... Funny how more people use Windows year after year but yet they are always on the brink of collapse, according to people that, surprise, have a Mac in front of their face.
Good, now I won’t have to find another webportal to use.
Yahoo will drop and we’ll see how much -— Monday
MSFT was nuts to be trying to purchase YHOO for that price anyway. They were basically buying it for 70x this year’s earnings which is nuts since Yahoo hasn’t grown much at all the last few years. I do like Yahoo’s layout and articles to some degree but dislike their search service.
... in China.
Part of the reason MSFT stock price isn't higher is BECAUSE of the Yahoo deal. It should return back to 33-34 soon. It's also half as cheap as APPLE is on a PE ratio for 2009 earnings (13.6 for MSFT vs 28.6 for AAPL). It's on pace for 14% (vs 21% for AAPL) earnings growth this year so I highly doubt it's best days are over as you suggest.
Not this time. Yahoo’s earnings have been flat or dropped in the last 2 years. MSFT’s first offer also wasn’t after Yahoo’s stock had dropped 60%. I expect Yahoo to open around 20/share on Monday, maybe less. MSFT open offer was nearly 80% higher than it’s closing price the day before the offer.
Apple understands Motorola's failures better than MOT does, especially when it comes to innovation. No company is more focused on innovation than Apple.
Apple's biggest challenge is managing their growth rate while maintaining their high standards of quality and good profit margins.
I don’t think it will continue but for maybe another year. After that, it’s stock won’t be able to justify the 40x earnings and it will go down to the MSFT/INTC level of 20x +- a couple points depending on where the market is. It’s a very risky stock to be in at it’s current PE Ratio.
Apple has plenty of great emerging products in the pipeline, such as the 3G iPhone, the Apple TV for the booming HDTV market, more Macs, more software, etc. The demand is strong, the component pricing environment is favorable, and Apple is doing an excellent job at managing their inventory, opening new stores, and investing in R&D appropriately. It is a well-managed company, and I see no reason why Apple could not sustain their P/E ratio for the foreseeable future.
40 PE Ratio is never sustaintable when an average PE ratio is 15 with 8% growth rate (with a 20% growth rate like Apple has, a 20-25 PE Ratio is acceptable). 3G Iphone is just a slight upgrade of an existing product. We’ll see how the Apple TV does. If you assume 20% growth, it will take 4 years just to get the stock from it’s current price down to a 20 PE Ratio. A lot can go wrong in 4 years in a business plan. That’s why I say at it’s current PE level it’s just too risky an investment. If the stock ever gets back down to say 130 or 140, it would be more reasonably priced factoring in both growth in a solid business plan risk of unpredictability and eventually growth leveling off.
AAPL has its risks, but they are a reliable, well-disciplined execution machine with a strong product pipeline and plenty of demand. If any company can justify trading at a premium over an extended period of time, Apple is the one.
If Apple comes under pressure, there are many things they can do to stimulate demand. The demand for the 3G iPhone is huge. The demand for the Apple TV device will grow as consumers make the transition to HDTV over the next few years. Apple is poised to dominate the content deliver business in the next few years. Whenever Apple decides to market a mid-sized tower Mac, it will fly off the shelves. Apple has plenty of opportunity in the enterprise space. And if they really get desperate, they can sell a shrink-wrapped version of Mac OS X for generic PCs. They would earn a huge windfall from that. It’s difficult to identify another company with so many good options for growth.
I have a great computer too, and I want to keep it that way, so I have avoided Vista like the plague.
25x PE Ratio is a premium (66% higher than the norm of 15x). 40x is speculation (266% higher). Apple is a great company at this point with many products coming down the pipeline but at it’s current price it is a speculation stock (You are speculating that it will maintain 25% growth rate for at least 5 years roughly at that PE—a lot can happen in that time frame).
Err..Make that 166% higher, not 266.
Microsoft should produce a vacuum cleaner -- it would be their first product that doesn't suck.
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