There was no rally. No mass unloading. No Wall Street riots. For MSFT, the day after wound up as just another murky trading session.
To recap: Some 47 million shares of Microsoft traded hands -- heavy, heavy volume. But after a topsy-turvy ride, the stock ended down 1 11/16, at 68 13/16.
What's the deal?
Confusion, for sure. And for good reason.
As the news played out on Thursday, everyone seemed ready to pontificate about the fate of Gates' enterprise (the legal options, the strategic maneuverings, the destiny of the stock price, etc.). Message boards exploded with vehement postings from supporters, detractors and hapless punters simply fishing for advice. Meanwhile, Wall Street's infamous talking heads fed more analytic numerology into an already convoluted and crowded debate.
The word from the Bulls:
Donaldson Lufkin & Jenrette said MSFT offers "compelling value at these levels," because -- it believes -- the case will go through a regular appeals process (rather than directly to the Supreme Court). The brokerage reiterated a "buy" rating and a bullish price target of $140. Yum.
Someone called RexK45 speculated on Ragingbull.com that Microsoft remains a great buy: "When everyone gets bored with being pessimistic about this company's performance over the next four years of appeals, M$ will be bringing in handsome earnings from Win2K and its other markets that it is competing unfairly in."
The Bears, as you might expect, saw things differently.
Thomas Weisel Partners set an estimated value for a bisected Microsoft applications company at $25 a share; the remaining operating-systems firm, they said, would be worth $20 a pop. Add that together, and you get $45 -- about $24 less than what the stock closed at Thursday. Ouch.
Meanwhile, CNBC.com message poster dottywest prophesied that Microsoft would drop below $20 this year, and that a big portion of that decline will come soon. "It will drop $15 when the DOJ submits its request for remedies in about two weeks."
So buy or sell?
No one seems to know for sure. All that's certain is that the variables are vast. Sure, Microsoft will appeal as Gates reiterated Thursday. But then what? How will several months of legal uncertainties affect the company's already-jolted stock price? And if a split does come, would top Microsoft execs unload shares of whatever company they're not working for, and rain chaos down on Wall Street? Even if Microsoft wins its appeal or reaches a settlement, some restrictions are in order. So how will that affect the stock?
Steve Shepich, an analyst at Olde Discount Corp., gives Microsoft only a 50-50 chance of ultimately winning the antitrust case. And if it loses, he believes a split will greatly erode the stock price. But he maintains an "accumulate" rating on shares of Microsoft because he believes its fundamentals remain strong. "The stock wouldn't be in the $60 range if it weren't for the trial," he says.
Meanwhile, the list of unanswerable questions scrolls on. So until Windows comes with a crystal ball, be sure to tune in tomorrow for the latest episode of "MSFT in Chaos."