Net Speculation Hurts Microsoft Stock

Microsoft's stock continues to decline today as the market nears its end of week close. The share price has dropped another 1 1/2 points to 88 3/8.

Yesterday the stock took a major hit falling $4.125 to close at $89.875 after Goldman, Sachs & Co. analyst Rick Sherlund downgraded Microsoft, listing the stock on his moderate outperformer list. The move caused a number of investors to turn bearish on the company. Sherlund cited the company's lack of preparation to deal with the emergence of the Net as a reason for the downgrade.

The company's online service, Microsoft Network, intended to give America Online, CompuServe, and Prodigy a run for their money, but has barely broken a sweat. The estimated 375,000 users it has attracted in its first two months is far short of the company's 500,000-member goal, and the service has been criticized as slow and lacking substance.

In a related a story, Dataquest, a San Jose, California, market research firm has significantly reduced its forecast of Microsoft's Windows 95 shipments for the year, saying sales were slower than expected. Dataquest's current projection is 20 million units, a third less than its original projection of 30 million.