When Wednesday's long-expected court ruling came down to split Microsoft in two, Wall Street's most battered posse -- MSFT shareholders -- dismissed the news like any true loyalists would: They kept their stock.
Microsoft ended the day slightly higher, up 7/8 to 70 1/2. During after-hours trading, shares of the software behemoth rose even more. Investors, it seemed, were shrugging off the news as non-news -- a mere pellet bouncing off bullet-ridden armor.
Take that, Judge Thomas Penfield Jackson.
Just goes to show that Microsoft's tried-and-true supporters want in for the long haul. Roller coaster G-forces and all, they're ready to stomach the ride. (Or, in the case of newbie Microsoft shareholders, they're thrilled they got in at half-price.)
Finicky, wishy-washy shareholders bailed when the going got tough this past spring. (Microsoft is trading more than 40 percent off its December high of nearly $120.) The trouble started, of course, on April 3, when Judge Jackson declared Mr. Gates' empire a monopoly, paving the way for today's unlovely ruling.
The stock promptly dropped over those next few weeks, bottoming out at 60 3/8 on May 26 -- a 52-week low. Worrisome reports about the company's future earnings kept the stock in the dumps.
Now, die-hard MSFT investors sense the worst is over -- at least until the appeals process gets underway. (Microsoft, natch, has vowed to appeal the ruling; the process could take up to two years.) Are people rushing out to buy more shares? Not exactly. But selling at a time like this seems awfully anticlimactic, especially when passions are running high.
Wednesday was a wacky day. By early morning, Microsoft shareholders, awaiting the big news, flocked to various financial message boards to defend the beleaguered Gates and crew. The postings ranged from comical, to snarky, to downright belligerent.
A few highlights:
"The 'Undisputed' Software & Browser King. s-c-r-e-w the DOJ!" wrote Snowi2 on CNBC.com.
"The king will rule again, only this time, stronger than ever," wrote another CNBC.com visitor. "Every day you hear about the government claiming victory, well my friends, it's not over until it's over and you can all rest assured that MSFT has not said it's last words."
Visitors to Ragingbull.com were even more dogmatic. A few posted revenge tactics to get back at Uncle Sam.
"If I were Bill I would just stop shipping windows 98, NT and Windows 2000," wrote RaptorDK7. "Then I'd raise the price of support to $500 an hour. Then after six months when the government figured out what kind of recession I would have put the country in, I'd let them come beg me to start shipping again."
Of course, there are legions of Microsoft haters, those reveling in the company's latest misfortunes. But Wednesday belonged to the ones who aren't giving up.
They are a proud bunch, these devotees -- weaned on Windows, in love with Internet Explorer and resistant to those colorful iMacs. They grew rich, at least for a while, on MSFT stock as shares doubled, then doubled again and again. They watched as the stock split and double-digit growth seemed to know no bounds.
Now, they know it's payback time -- in other words, they'll hold on to their shares, hopeful that Jackson's ruling will be overturned by an appeals court. When the dust settles, they believe Microsoft will continue to make lots of money for them. Look, when Paul Allen sells 2 million shares of Microsoft common stock -- valued at more than $128 million -- and investors don't bail, you're dealing with true believers.
What do the analysts think about Microsoft stock? Is it still a good buy?
Not really, but they're not calling for everyone to sell just yet.
Most believe that if Microsoft is indeed forced to split, the company's value will diminish as employees leave and the firm tries to figure out what asset goes where while still keeping an eye on those core businesses.
But some analysts -- like those shareholders -- believe Microsoft should prevail. Brian Goodstadt, an analyst with Standard & Poor who has an "accumulate" rating on the stock, believes the case will turn in Microsoft's favor at the appellate level. "Many people do think it will eventually win," he said. "My recommendation is just to hold on."
That said, Goodstadt doesn't believe Microsoft is necessarily a good buy. "It still has a rocky road ahead," he said. "It's definitely not for the faint of heart."