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Morning News

Kashyap: 'Own Microsoft and Forget About It'

Aired April 4, 2000 - 9:17 a.m. ET

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

DARYN KAGAN, CNN ANCHOR: For consumers, the most immediate impact of the Microsoft ruling is being felt in their portfolios, not on their PCs. After yesterday's 15-point plunge, the question is, should you buy, sell or just hang on to Microsoft stock?

Joining us from our Washington bureau with some perspective is Hans Kashyap. He is president of Analytics Research Corporation, a market forecasting and consultant company.

Thanks for joining us.

HANS KASHYAP, ANALYTICS RESEARCH CORP.: My pleasure.

KAGAN: Yesterday's ruling very interesting from a legal perspective, but most people going on their PCs want to know, first of all, if you own Microsoft stock is it a thing to hang on to?

KASHYAP: Absolutely. Microsoft has been one health (ph) of stock for the decades of the '90s. As long as the wizard, Bill Gates, is still in charge of the company, you have to own Microsoft. And at this point, the thing to do is to just hang on to it, 25 percent of the stock fund managers have had this particular stock. And I think the sell-off was more of knee jerk reaction than anything else, just panicking.

But it is a definite hold and possibly even a buy if it falls further down to the $80 level.

KAGAN: Which is the next question. So right now, in the low 90s, it is not a buy?

KASHYAP: Well, at this point, in the low 90s, 90s to 80s, it is probably a hold and another attractive buy. You have to remember it's had a huge, huge run up. And at this point, it is going to be more of a trading range type of stock with the low end being at 80-90, and top-end being 117-120. And I would expect it to sort of bounce around, trade around this area until some of these storm clouds blow over and we get a better feel of what the penalties are going to be that are going to be imposed on Microsoft.

KAGAN: So if you don't own it, and are thinking about maybe owning, you maybe want to wait and see what the penalty phase is going to be, and then you might even get a better price than you have right now? KASHYAP: Well, it's possible. If you own it, hang on to it. If you don't own it, then start nibbling at it around these levels under 90, absolutely, to 80.

KAGAN: And looking way ahead, I mean, you're just talking about a 10-point range, but if you look way down the line, if you look at other companies, and we are not saying Microsoft is getting broken up. But other companies that have had poor antitrust rulings and have been broken up, those have been huge investments, like AT&T and Standard Oil, if you had bought them then.

KASHYAP: Absolutely. And at this point, nothing is really materially changed in the terms of the way Microsoft is going about doing its business, it is a very attractive company, excellent management, and at this point, my recommendation and we hold Microsoft ourselves is simply to own Microsoft and forget about it. Don't worry about these day to day type of things, the appeal process is going to take a long time, and at this stage, it is still a long-term buy and hold.

KAGAN: Own it and just forget about it. OK, thank you very much, Hans Kashyap thanks for you insight this morning.

KASHYAP: My pleasure.

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