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HEXUS.sharewatch: Microsoft plunges while Google and Apple gain

by Scott Bicheno on 26 January 2009, 09:51

Tags: AMD (NYSE:AMD), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG)

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After close of trading on 21st January, Microsoft announced it was going to cut up to 5,000 jobs in the light of an 11 percent drop in profits.

The next day there was a high volume of trading in Microsoft's shares - and not the good kind - as prices ended the day nearly 12 percent down on the previous day.

The negative sentiment towards Microsoft (and let's not forget, it still managed to make over $4 billion profit) could have been exacerbated by the fact that two of its principle competitors: Apple and Google, both exceeded expectations with their quarterly earnings.

The impression created is that of Microsoft's grip on the markets it has dominated for so long looking increasingly shaky, as it tries to adapt to the new realities of the web dominated world. The continued attentions of the European Commission will only have reinforced that impression.

It was another bad week for AMD shares, after the chip maker announced another quarter of big losses, exaggerated by the need to keep writing down the value of its acquisition of ATI.

Having said that, AMD's shares actually gained a little last Friday, when the earnings announcement was made. This is probably because the figures were already priced in after AMD announced yet another round of job cuts on Friday 16th January.

US markets were closed last Monday for Martin Luther King Day, but when they re-opened on the Tuesday AMD's shares dropped by over 12 percent.

 

Company Listing Share price 5/1/09 Share price 12/1/09 Share price 19/1/09 Share price 26/1/09 7-day change Market cap (bn)
AMD AMD 2.38 2.69 2.29 2.07 -9.6% 1.26
Apple AAPL 90.75 90.58 82.33 88.36 7.3% 78.68
Avnet AVT 18.98 17.45 17.96 18.68 4.0% 2.81
Dell DELL 10.75 11.12 10.27 10.14 -1.3% 19.72
Google GOOG 321.32 315.07 299.67 324.70 8.4% 102.20
HP HPQ 36.81 37.49 34.77 35.79 2.9% 86.16
IBM IBM 87.37 84.70 84.92 89.49 5.4% 120.23
Ingram Micro IM 13.98 13.22 13.50 13.19 -2.3% 2.17
Intel INTC 15.20 14.15 13.74 13.12 -4.5% 72.97
Microsoft MSFT 20.33 19.52 19.71 17.20 -12.7% 152.92
Nvidia NVDA 8.71 7.93 7.99 7.71 -3.5% 4.14
Tech Data TECD 18.80 19.15 19.41 19.04 -1.9% 0.95
Yahoo YHOO 12.85 13.13 11.59 11.32 -2.3% 15.69
Dow .DJI 9034.69 8599.18 8281.22 8077.56 -2.5% N/A
FTSE 100 .FTSE 4561.79 4448.54 4147.06 4052.47 -2.3% N/A
NASDAQ .IXIC 1632.21 1571.59 1529.33 1477.29 -3.4% N/A


HEXUS Forums :: 1 Comment

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Not to harp on but, again the 10-12% up and down in this climate is pretty common and doesn't mean to much, a weekly outlook gives vastly misleading information lately.

Likewise, AMD's losses were far LOWER than expected and caused a stock rise once announced. Writing down the value of ATi is ultimately what lots of companys are doing with parts of their company, why? Tax breaks, and multiple other reasons. ATi isn't particularly worth less than it was, its market share is increasing and competing incredibly well, their value is being written down as its in the interest of the company and saving them money.


AMD announced some more job cuts, so have big blue, and Intel announced another major cull, Google aswell. In general job cuts are leading to share prices rising amongst many companies as it gives shareholders confidence that whatever the company happens to be, is making a bit effort to restructure and scale down to the current market conditions. Intel's reasoning, theres little point keeping 3 more fabs open, when there isn't any work for them to do. Short term redundancy costs are nothing on the savings on shutting down those 3 fabs over a few years and shareholders know that. Intel AMD and Google showed gains after announcing losses, before going on to follow the tech sector trend of drops.