On Tuesday, the U.S. Supreme Court sent the

antitrust case against software titan


(MSFT) - Get Microsoft Corporation (MSFT) Report

to the U.S. Circuit Court of Appeals for the District of Columbia. Investors saw the move as a victory for the embattled giant, but many questions about the firm's legal and business issues remain unanswered.


polled several tech-fund and growth-fund managers to get their takes on the news. Their responses to the following questions varied greatly:

What do you make of today's Microsoft news and does it change your outlook for the company?

Great News, but Problems Remain

Bob Turner, portfolio manager of the no-load (TTOPX) Turner Top 20 fund. ( Click here to read an interview with Turner.):

The news is positive. Since this appeal process began, the feeling has been that Microsoft would have its best shot with the Washington D.C. Court of Appeals. The feedback I'm getting is that the appellate court in D.C. is probably more willing to listen to Microsoft's side of things. From Microsoft's perspective, this is the best news they could've gotten, short of the government dropping the case.

Short term, I still think Microsoft has some problems. They get their revenue from PCs and sales are sluggish. We don't currently own shares in the fund, but longer term, the company probably offers a great risk/reward proposition. In the near term, we just believe there are other areas that are probably more interesting. Even though there are question marks, we like the telecommunications area, namely fiber-optic networkers, the data-storage sector, and e-business software.

No Big Deal, and Problems Remain

Jim Grefenstette, co-manager of the broker-sold (FGSAX) - Get Federated MDT Mid Cap Growth A Report Federated Growth Strategies:

I don't really think today's news means that much. Government involvement in a company rarely creates value and it often destroys it. At the very least, Microsoft's legal problems have been a tremendous management distraction. I think this news comes at a time when there are greater problems for Microsoft. It comes at a time when they appear less relevant. I wouldn't short them, but I would call them a "show me" stock right now.

We have small exposure to Microsoft in the fund

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0.3% to 0.4% and aren't inclined to add to it here.

MSFT: Back in the 70s?

Joe Beaulieu, a senior stock analyst covering hardware and software stocks for Morningstar:

I don't see today's decision as being a huge positive for the company. I think it's something that had to happen and something that was expected. The Supreme Court doesn't usually like to take cases with so many issues. They prefer an appeals court sort it out.

Still, I think this lifts the lid on the stock. I could see it going back to the 70s, but business hasn't been great this quarter and I don't think that's a secret. I think lukewarm business and legal uncertainty will keep the stock from going much higher. I do think it's pretty cheap here. I don't necessarily think it's going to 120, but if you look at other tech companies with similar growth rates, Microsoft looks pretty cheap.

It's All Good

Dave Santos, co-manager of the broker-sold (PTOAX) - Get PIMCO StocksPLUS Absolute Return A Report Putnam Technology fund. ( Click here for an interview with Santos.):

Today's news makes us more positive on the legal question and it doesn't change our fundamental view on the company, which is generally positive. In terms of today's action, it's positive because Microsoft will fare much better

in the appellate court than in the Supreme Court. It doesn't change our fundamental view on Microsoft. That's positive, more positive than it's been. The Windows 2000 ramp-up should come in the next six to nine months, which should give them a boost going forward.

The fund doesn't currently own Microsoft shares, but it has in the past.

I'm a Believer

Rose Papp, co-manager of the no-load (LRPSX) Papp Stock fund:

Today's announcement didn't surprise me because something like only one case in history has gotten expedited to the Supreme Court in the last 26 years. I had a conversation with Microsoft in April and they felt they would go through this appeals process where they've been successful in the past. Their point is that the lawsuit is about a narrow situation that was maybe overblown. I think there are a lot of issues and it's going to take a long time. This appeals process will take a long time and then whatever side loses will appeal to the Supreme Court.

I think that, in the short term, people are worried about earnings here and in the whole tech sector because a lot of people have taken down their estimates. I think people are concerned about companies' reception of Windows 2000, so people are looking at that closely. I'm still a believer in the company long term and we've bought it since it has come down. Microsoft is down from about 120 to a little over 60 and this is the lowest premium to the market Microsoft has ever had. On that fundamental valuation, compared to where it has usually traded, it looks cheap. This stock's price decline partially reflects the lawsuit, but it also reflects a slowdown in earnings growth. Still, I don't think this is an expensive multiple to pay for this business.

The fund owns Microsoft shares today and the stock was an 8% position in the fund at the end of the second quarter.

We're Getting MSFT Cheap Today

Bob Grandhi, portfolio manager of the broker-sold (MFITX) Monument Internet fund:

I've been thinking about this question all day. It's an important event. In the past, appellate courts were kind to Microsoft, not to say that will happen this time but the perception is that this court will be more sympathetic. From a practical point of view, this will give the company some breathing room. All in all it's a net positive for Microsoft. In terms of ramifications, we don't yet know if Microsoft has been slipping because of their own mistakes or due to the distraction of this legal case.

At this point I have only a small Microsoft position because we're focused on the Internet and unless they become more of a Net company, that keeps us away. If I were running a broader tech fund, though, I'd see a great deal of value in Microsoft's stock now. In the short term, the real variable you have to look at is how much deeper can they get into their corporate accounts with their products. I definitely see a great deal of value in the stock. I think we're getting it cheap today. For a tech fund it's a great opportunity to buy them at this price. If they were to make the Net a bigger part of their business two years from now, they might be our top holding.