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MSFT Up With Markets
Stocks are up in early trading as home prices rose for the first time in eight months, boosted by an annual flurry of spring buyers. Shares of MSFT were shaky at the open but are now trading in the positive. Upcoming catalysts include today’s launch of Office 356; second calendar quarter results to be released in July; the company’s Analyst Day at its new developer conference (BUILD) in September; Windows Phone 7 / Mango adoption with hardware partner Nokia; strides against current market leaders in cloud computing; entrance in the tablet market at some point; making money in the online business including integration of Skype and improving the search / display business (see below); and continued evolution of Kinect and the next generation Xbox console. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.
Windows 8 Schedule Could Be Sooner Than We Think (ZDNet)
Shares of Microsoft were up nearly 4% yesterday on rumours of an accelerated time-frame for the company’s next version of Windows, Windows 8. ZDNet’s Mary Jo Foley believes that rather than a staggered introduction of Windows 8 over the first three quarters of 2012, Microsoft may release Windows 8 to manufacturing all at once in April 2012. She also writes that “Microsoft’s game plan is to deliver a beta build around the time of the Build conference in mid-September.” An April manufacturing date would help make sure there are Windows tablets and PCs for the holidays in 2012.
S&P Reiterates Buy Rating On Office News (Barron’s)
S&P analyst Jim Yin reiterated his Buy recommendation on Microsoft based on the launch of Office 365. He views this development as a positive, as the company competes with Google in the emerging online productivity suite market. Revenues will likely be incremental at first, but will eventually cannibalise sales of Microsoft Office, as customers shift from a desktop version of the software to the cloud computing version. That’s great and all, but what happens to customers who trusted Microsoft’s last online service?
Microsoft Nails A Second Android Device Maker In Patent Licensing Agreement (The Register)
General Dynamics Itronix has agreed to licensing certain, unnamed Microsoft patents for use with Android-powered portables. Detailed terms of the deal have not been announced, but Microsoft will receive royalties from General Dynamics Itronix under the agreement for every Android device it sells. The company follows smartphone maker HTC to also agree to pay Microsoft royalties on patents it claims are used in connection with Google’s operating system. Microsoft receives $5 per Android device HTC ships.
Microsoft In New Super Wi-Fi Consortium (The Microsoft Blog)
Microsoft says it has the fix to the world’s spectrum crisis: unused broadcast TV spectrum called “white space”. Don’t get too excited. It could take years before technology supporting white space spectrum finds its way into popular mobile products. Microsoft is part of a new consortium (The Cambridge TV White Spaces) that will test the use of open television broadcast frequencies for wide-reaching wireless Internet service, a technology known to some as “super Wi-Fi”.
Daily Trader: Microsoft Options (Seeking Alpha)
Microsoft investors have had a wild ride of late. A covered call approach still makes more sense than buying the stock and holding the shares outright. Perhaps even better is selling the January 2012 $25 put options for $1.87. This approach does not require the stock to actually rise for the position to make money. Likewise, selling the put options make a lot more sense than buying the stock for 401K investors who are not taxed based on short term or long term gains.
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