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The Register: Is MS heading for a share price meltdown?

Mar 07, 2000, 16:35 (4 Talkback[s])
(Other stories by Graham Lea)

"The last 12 months has seen the Dow Jones industrial average rising just over 4 per cent while the NASDAQ composite index has doubled. In the same period, Microsoft's share price has gone up just 23 percent, and so is seriously underperforming in the high-tech market."

"Thoughts are increasingly turning to the question of whether there will be meltdown in the share price if Microsoft has a bad quarter. Many investors will certainly have an exit strategy in the form of a stop-loss sell order on their holdings, and once these begin to be triggered, a dramatic fall is a serious possibility."

"The evidence to hand suggests that any such fall would not greatly upset NASDAQ companies unless they had a high reliance on Microsoft. However, with Microsoft now being a component of the Dow, the chances are that the Dow would be dragged down to below levels of a year ago. In looking for a target for their wrath, it would be hardly surprising if the financial analysts did not decide that the clay pigeon was Microsoft, and dumped their Microsoft holdings."

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