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CNN Live At Daybreak

Will Investors Ride Microsoft Wave Again Today?

Aired June 29, 2001 - 07:07   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BRIAN NELSON, CNN ANCHOR: Wall Street cheered the Microsoft ruling, sending shares higher in a flurry of trading.

Are investors going to be riding the Microsoft wave once again today?

Let's check in at the CNN Financial News desk with Chris Huntington.

Good morning, Chris.

CHRIS HUNTINGTON, CNN FINANCIAL NEWS CORRESPONDENT: Good morning Brian.

(CROSSTALK)

NELSON: What's Microsoft stock doing now?

HUNTINGTON: Well, it is up just a little bit, up about 40 cents in premarket trading, right now at a level of about $73.15 at close yesterday, obviously below $73.

The initial reaction on Wall Street was very bullish. And, in fact, Microsoft shares traded up as high as well over $75 a share, basically a jump up of more than $4 compared to the preruling price.

However, once folks got into that very complex 125-ruling, they realized that it was not a total unmitigated victory for Microsoft. And, indeed, the enthusiasm tempered a bit. Microsoft yesterday closed at $72.74, up about $1.60.

The issue going forward for investors really has more to do with Microsoft's business fundamentals. Wall Street investors somewhat of a jaded lot, and they tend to -- they tend to sort of discount the impact of a long, protracted court case. By and large, the avoidance of a breakup had pretty much been factored into Microsoft's stock price.

There were not too many investors who really believed that a breakup was going to be carried through. The ruling yesterday makes that proposition look even less likely. But as I mentioned, Microsoft investors really will be focusing on the core fundamentals of the business. They have their new XP operating system coming out, the Xbox game console, a whole new strategy called the "Dot-Net" strategy. And investors will be focused on how well that flies in the marketplace.

NELSON: All right, Chris Huntington, thank you.

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