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Red Hat Software Businesses

Microsoft Trial and the Effect on the Dow? 13

Posted by Cliff from the buy-low-and-sell-high dept.
NNland asks: "What's kinda neat is that Red Hat stock prices went up $18 yesterday. The idea that the MS trial has pushed people towards investing in MS's competitors has surfaced, but with a drop in price of merely $1.26, this could be a bit questionable. Though when you take into consideration the fact that there is probably alot more MS stock on the market, it brings up the question of whether or not the amount of money lost on MS stock is close to the amount that Red Hat gained. What do you people think? I tried to get hard numbers, but I was having problems wading through the numbers. " Now that would be one hell of a correlation if it were true (although I doubt it). Does anyone have any hard numbers?
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Microsoft Trial and the Effect on the Dow? More

Microsoft Trial and the Effect on the Dow?

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  • Look at how much IBM droped when they announced they were dropping PC sales.

    The simple fact is that most of the people on the market do not [have time to] understand the comptuer buisness. They understand management, and all those little numbers, but not the buisness. When an announcement is made they don't know how it affects the bottom line so they guess. Even those who do understand something can only understand (at most) 30 companyes (10 is normal).

    If you want to know how the market works, study it. Take classes in ecconomices, but take them many places. Make sure you get a professor who teachs "Reganomics" and one who doesn't belive in it. Make sure you get cummunists and libratarians. Then use that only to help you understand how some people behave. Little changes in one area can have drastic changes in anouther. Microsoft seems most obviously affected, but redhat stock seems to have changed the most, yet BE probably has the most to gain... (guessing on the last part, to make a point)

    I recomend you head over to The fool website [fool.com] and read up, then pick some stocks, read the 10Ks and all the other reports you can find, and then watch to see what happens. You can use real money if you want, but becareful as you can lose it.

    The point: nobodu really understands the markets because it is controlled by people. People sometimes work on emotion, and emotions are not understood intilectually. (Or alternativly, some poeple in the market work on logic, and most people don't understand logic. Most /. readers need to remember the former statement, but there are those putting money into the market that need to remember the latter)

  • RHAT gained about $1.24 billion in market valuation yesterday. But MSFT lost a little more than $6 billion. Obviously, as a percentage of total valuation (MSFT is around $460 billion), RH gained much more, but as far as money shifting, a lot more left MSFT yesterday than went into RHAT.

  • Its hard to say that Red Hat only will automaticly gain market capitaization from Microsoft.

    And what about other companies? Who is to say that they won't gain in price due to this Fact finding? Other software companies did go up in price on Monday.

    Also, some people may pull out money from _all_ software companies on the reasoning that advancement of the technology is going to be slower since the leader is now weakened.

    Then again some people would be buying since 1. This trial has been going on for over a year. This really isn't suprising, unlike missed earnings. 2. The conclusion to this whole thing might not be until 2002 (when appeals on judgements reach the Supreme Court). Thats along time, and MS will have 2 more OS versions out (apparently big-time revenue streams)

  • BeOS gained 70% yesterday, and SUN and others were up quite a bit.

    Regardless, though, I think that the "market" has missed the glaring significance of this whole case: The damage has already been done. The net result of this case has been to erode the image of the all powerful Microsoft, and has given the various PC manufacturers the courage, so to speak, to sell PC's without Microsoft software. Since the bulk of their money is made by not doing anything (I mean, by pre-installs), if even 5% of machines come without Windows XX, then that's a significant drop in earnings).

    On a second front, public perceptions of Microsoft has tarnished. They're not the same, super great company they were perceived to be before. Now, more and more people are seeing them as the robber barons of the 90's. People are looking for alternatives. People recognize that people don't like Microsoft software. Just 2 years ago, saying that I didn't use MSFT software on principle elicited "huh? Why?"'s from most non-computer people I know. Now, people at least go, "oh" ;-).

    Sujal

  • ... Corel, if you don't know already, is making
    a KILLER Linux Distro.. Its going to look & feel
    EXACTLY like MS Windows.. and Microsoft can't sue
    because they did the same thing to Apple way back
    when.. and WON. So they have to sit back and
    watch Corel do the same thing to them. Corel is
    going to show the Linux Distro on Nov. 15th... It'll have Network Neighborhood, My Computer, Control Panel, etc.. Samba will be under the hood, but you'll connect computers together the same way you do in Windows. You have NO IDEA how powerful that is! The stock is going to SHOOT UP once people see the true power of this distro!
    And yes,
    I put my money where my mouth is.. I have $17,000
    invested in Corel.. And proud of it! :)


    -Matthew
    Technetos, Inc.
  • Wow! THAT'S great! I can't WAIT! GOOD luck! You're RIGHT; I have NO IDEA how powerful that is!

    YOW!

  • The volume on monday for MSFT was pretty impressive. That says one of two things to me, for all the spooked people dumping MSFT stock, there were people who think this is a good buying oppurtunity. Or, MSFT was repurchasing its own stock, to prevent a signifigant dip, which would spook investors even more, which would cause a larger dip, etc. With the percentage of employees whose time is compensated primiarly with stock, they can't afford to let their price tank.
  • Maybe it's just my habitual paranoia showing, and/or my ignorance of things stock, but I suspect MicroSloth of doing everything possible to keep the price up. Monday and Tuesday it's started a little down, dropped until noon-ish, and struggled back up to a minor loss.

    I may well be reading the numbers wrong, but wasn't Monday afternoon's rally the result of a couple of huge trades, like a quarter of the day's volume?

  • I tried to look at the volume throughout the day, but yahoo lost its feed right as the rally started, and didn't regain till the end of the day, so they just linearly interpolated. Interesting.
  • Found another site, with 1 minute timeslices. Upon opening, it twiched for a while, then kicked up 8 points, then back down. It did that a few times. Then, throughout the day, it would drop about 5-10 points, and within a minute jump right back up to its last value. I'd like to hear from someone who knows more about this stuff than I, but to me, it looks like a program was issuing buys on a minute by minute basis to keep the stock steady.
  • The fact that tech stocks went up overall that day, even after all the analysis about how this could drive down the whole stock market, suggests to me that investors actually believed Judge Jackson's ruling. That is to say: they believed that Microsoft has been holding back the computer market, and that, if they're prevented from doing so, the overall market will grow. In other words, the opinion of the market seems to be that Microsoft has been stifling innovation.
  • Thanx. Ya I can't wait either, it should be REALLY powerful. I believe they show Corel Linux off at Comdex in Las Vegas on Nov. 15th.. Thats the official LAUNCH date from what I understand.

    COREL by the way just went to $9. who ever
    isn't onboard with the stock now.. well.. is about to miss the boat on a FORTUNE. Simply put.. INVEST in Linux! Your money won't only make you rich, but also help push Linux into the forfront. :)



    -Matthew
    Technetos, Inc.

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