Why The EU's Fines Against Microsoft Aren't So Significant (MSFT)

Jun.29.06 | About: Microsoft Corporation (MSFT)

The EU is getting fed up with Microsoft (NASDAQ:MSFT) who are still not turning over information on their operating system to competitors despite fines of $2M per day. $2M per day is the interest on 20% of the company's annual profits! They are being threatened with an increase in fines to $6M per day, something even Microsoft might notice, but here's my evil corporate monopolist take on that:

I make $12Bn a year in profit ($33M per day) using anti-competitive practices. If I set aside $3Bn for possible fines out of the $40Bn I have on hand the interest will more than pay for even the tripled fines.

Meanwhile I am protecting my lead, keeping my competitors from moving forward while my people can keep working on our new operating system that I have gamed to be so different from current versions that the code I will eventually turn over will be obsolete the minute we comply.

It will take another 5 years of trials and appeals before we get fined for our new version and by then we will have something else to baffle the courts with. By then we will have so much money in the war chest that we will be able to bankrupt most countries who want to take us to court!


If MSFT breaks throught the $23.50 mark today, I like the Oct $25 calls for $0.50.