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American Morning

Microsoft Stock: Buy or Sell?

Aired June 29, 2001 - 11:41   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.
LEON HARRIS, CNN ANCHOR: Got to end the week on some big news here at CNN -- can't have a normal day going out of here.

So yesterday, the big news was Microsoft. And, as you may know by now, Microsoft apparently is going to stay together, at least for the immediate future, because of the ruling that was tossed out by the appeals courts yesterday. But what does that mean for people who own Microsoft stock? And we understand there are plenty of them out there.

Let's bring in Jay Greene. He is the Seattle bureau chief for "BusinessWeek" magazine. He has got some advice for us this morning, I hope.

How are you doing this morning?

JAY GREENE, SEATTLE BUREAU CHIEF, "BUSINESSWEEK" Good, thanks. Yourself?

HARRIS: Not too bad -- and a bit puzzled, because the word I just heard moments ago is that Microsoft's stock now is actually down 72 cents. It's at $72 right now. I wouldn't have expected that.

GREENE: Well it's interesting because I think there are some negatives in this ruling that folks are beginning to learn about. And I think the biggest problem for Microsoft right now is that the issue of tying is still on the table, that they -- that the lower courts are now going to able to rule yet again on whether or not Microsoft can bind its -- write its products to the Windows operating system.

HARRIS: Yes, but this is obviously going to drag on for quite some time. If it's got to start from scratch with a whole new judge and everything, this is going to go on for years. So what advice would you give people who are holding that stock right now? Would you tell them -- would you expect it to go through some major changes, as it has recently?

GREENE: Yes, I mean, this thing is going to drag on for awhile unless the two sides can figure out a way to settle. So, you know, sit tight. Fasten your seat belts. And there's a lot of other reasons to invest or choose not to invest in Microsoft. But if you are looking just at the case, it is going to go on for awhile.

HARRIS: Yes. So what do you -- do you buy? Do you sell right now or what?

GREENE: Well, I mean, a lot of the analysts out there are suggesting buying. And I think there are some interesting reasons why. Microsoft has a lot of the cash in the bank right now: $30 billion. They have a whole slew of new products coming out. There's some good reasons to pick up the stock these days.

HARRIS: All right, well, give me the best-case scenario you have for selling the stock and give me the best case you have for buying it right now.

GREENE: Well -- so the best case for selling is that this case drags on for a while. And, you know, the breakup is off the table for now. But it could come back depending on what the lower courts rule in terms of whether or not tying is legal or not.

For buying, look for Microsoft's products to take off. Windows XP is coming out in October. It will be a big product. And there are a few other new products out there as well: Xbox. There are some reasons to buy as well.

HARRIS: Yes, I have been hearing quite a bit about the XP and the Xbox projects. If those two come out and really come out gangbusters, do you think they wipe away all those concerns that were still raised by the ruling yesterday?

GREENE: It's really the opposite. If Windows goes out gangbusters, I think there are going to any number of folks -- AOL top amongst them -- that will say they are bundling the product again; they're doing anti-competitive things to make it harder for AOL to win over customers.

HARRIS: Trust me, with AOL, we'll find out when you do on that one.

(LAUGHTER)

GREENE: There you go.

HARRIS: All right. Well, Jay Greene, thanks very much for the advice this morning. We will check and see how things turn out.

GREENE: Thanks for having me.

HARRIS: Take care.

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