Protracted Trial Dragging Down Microsoft Stock

WASHINGTON -- As government lawyers continue to tear apart the testimony of Microsoft (MSFT Quote) witnesses, fund managers with big stakes in the company are starting to acknowledge that the company's stock is suffering from investor fears that Microsoft could lose the antitrust trial.

"The stock has acted somewhat weak lately, and it's probably because people are concerned about the trial," says Jeff Van Harte, manager of the $290 million (TEQUX Quote)Transamerica Premier Equity fund.

Since closing at 175 on Jan. 29, Microsoft stock has fallen 15%, more than twice the 6.5% drop of the Nasdaq Composite Index during that time. Microsoft watchers and investors say the daily tidbits of bad news from the trial are starting to have an effect. The stock closed Monday at 148 13/16, up 1 1/16 despite news that two companies had filed class-action suits against Microsoft, alleging the company used monopoly power to overcharge for its software.

Microsoft spokesman Tod Nielsen says the stock price historically dips in February and was due for a pullback anyway, given its huge runup in January. "The trial has certainly not affected it directly," he said Monday. ...