US analysts were warning shareholders not to panic after the ruling against Microsoft, but even Microsoft officials appeared shocked at the severity of the ruling from Judge Thomas Penfield Jackson.
The share price plummeted during after-hours trading when news of the ruling was announced. Microsoft shares fell to 863/4, down from 919/16, reducing the value of the software giant by $25bn (pounds 15.4bn).
The ruling is expected to impact on the share price keenly when the US markets open on Monday, and will drag down the Dow Jones index, which Microsoft joined only a week ago, as well as the S&P 5000, where Microsoft is the largest constituent.
Over the past 24 hours, Microsoft shares have been on a rollercoaster ride, rallying at the end of Friday's trading and continuing to rise during initial after-hours trading.
Although the decision against Microsoft is expected to weigh down the broader stock market, analysts have been quick to point out that this is just the initial stage of the ruling, and are urging investors to think long-term.
"The ruling is not as harmful to Microsoft as it appears, but it is still disappointing and will set a negative tone in the market," said Art Hogan, chief market analyst with UK investment bank Jeffries & Co. Shares in Microsoft have risen 72 per cent in the past 12 months.
Though the ruling on Friday was only a finding of fact, with the action to be taken against Microsoft not known for at least another month, the tone of Judge Jackson's ruling made it seem like tough measures were on the cards. There is a widespread expectation that Microsoft may seek a settlement with the Justice Department.