A run on the bank of Microsoft

NOTE: I don't own any Microsoft stock. Nada. Zip. None.

I just checked the news wires and stumbled on something quite remarkable. It's a little after 10 am, and Microsoft stock has already traded close to 140 million shares. Let me repeat that. The NASDAQ opened at 9am, and in a little more than an hour it's traded more than twice its daily average of 58 million shares. To top that off, it's down almost 11%, or $3. What happened?

Microsoft reported earnings that missed Wall Street expectations and lowered its earnings expectations. Microsoft reported revenue of 10 billion for the last quarter. The greedy bastards on Wall Street were expecting 11. Right now their stock is trading at around $24/share as everybody cashes out and "takes profit".

For those in the Linux community who take solace in Microsoft's problems, such as today's stock market fiasco, let me warn you that what goes around comes back around, usually with interest. The carcasses of defunct Linux distributors litter the landscape, and those that are left are not too healthy. Novell, while cash rich, is sales poor, especially when selling Suse. Redhat, while the healthiest and with the greatest US market share, is still puny when compared to Microsoft. Redhat's few offerings are dwarfted by the breadth and depth of Microsoft's product offerings, and the $1 billion shortfall for this past quarter is more than Redhat has earned its entire existence, let alone in just one quarter (or even one year). I mean, Microsoft reported a 13% increase in revenue over the same period last year, and that's bad news because it wasn't high enough? Give me a frikkin' break!

As I work day-to-day with Linux on the desktop and constantly compare it with Windows, I have come to realize that 1) Microsoft on the desktop is not that bad and 2) Linux on the desktop is nowhere near that good. I wake up every morning looking forward to being flamed when I complain about yet another shortcoming in Linux on the desktop. Not. I'm tired of fighting the shrill Linux zealots who drag their considerable emotional baggage into defending their holy operating system. And make no mistake, today's drop in stock price will be yet another piece they throw up on their collection of suitcases. I am just waiting to read on the forums about how this is truly the Beginning of the End (TM) for Microsoft. It isn't anything of the sort. Microsoft's markets are shifting, especially over to China and India. Microsoft delayed delivery of Vista. Again, big deal. What's available works fine, and I can wait until it's done right. Paul Thurrott has already gone over in fine and eloquent detail Vista's shortcomings, so I won't belabor those points. From what I've read it will be better in a lot of areas, though it won't have the earth-shattering features first promised. What's more relevant, however, is that it will improve over XP, and Linux distributions will still be chasing its tail-lights technically. It will still be behind the real power curve set by Windows (and Mac OS X).


It's just after 6pm. Checking Yahoo, I find that over 590 million Microsoft shares traded hands today. That's over 10 times (an order of magnitude) greater than the average. Or to look at it another way, out of 2.6 billion shares total that traded on the NASDAQ, Microsoft made up 23% of the volume. That's one company that had nearly a quarter of the total volume on the NASDAQ on a trading day described as having "heavy volume."


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