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David Einhorn of Greenlight Capital believes Microsoft is a solid buy, and even though the company doesn't always get credit for its achievements, its business has been much stronger than the average company in the S&P in the past five years.
His hedge fund currently holds around 9 million Microsoft shares and he openly recommends the stock, but the influential investor thinks there's one thing holding the Redmond-based company back: its CEO Steve Ballmer.
Speaking at the annual Ira Sohn Investment Research Conference in New York yesterday, Einhorn said it was time for Ballmer to step aside and give someone else a chance. He criticized Ballmer's "Charlie Brown" style of management and claimed his continued presence is the biggest overhang on Microsoft stock.
"Ballmer's problem is that he's stuck in the past," Einhorn said. "He's allowed competitors to beat Microsoft in huge areas, including search, mobile-communications software, tablet computing and social networking. Even worse, his response to these failures has been to pour tremendous resources into efforts to develop his way out of these holes."
He argued that cloud computing is one area where Microsoft could excel, and said the company has one more shot at the rapidly growing smartphone market through Windows Phone 7 and its partnership with Nokia.
According to Reuters, Einhorn's remarks echoed comments that some investors have said for years in private. Indeed the company's stock has dropped by more than 50% since Ballmer took over founder Bill Gates as CEO in January 2000, and in the last year has seen rival Apple grab headlines for passing it in in market value and quarterly profit. This week IBM also overtook Microsoft in market value for the first time in 15 years.
User Comments: 15
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David Einhorn predicted the Lehnman Bros fall. People should at least listen.
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Has anyone noticed when there is an article about Ballmer they almost always use a "monkey boy" pic
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I have several friends who work for MS. Two of them work pretty high up the food chain and bump into Ballmer now and then while working on their respective projects. They absolutely detest the guy. Seems he is pretty much universally disliked within the company. That's never a good sign...
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MS is so irrelevant now they weren't even invited to the Obama technology meetup a few months ago: [link]
They have become a commodity and most innovation comes elsewhere. I really believe Ballmer is the main reason for Microsoft's stagnation.
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KG363 said:
marioestrada said:MS is so irrelevant now
facepalm.jpg
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Is IBM irrelevant, Dell, HP, Oracle?
MS is just a BIG technology company. It is not hip like Apple or Facebook.
It is still a force. It may need a change at the top, but it is still relevant.
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TekGun said:
marioestrada said:MS is so irrelevant now they weren't even invited to the Obama technology meetup a few months ago: [link]
They have become a commodity and most innovation comes elsewhere. I really believe Ballmer is the main reason for Microsoft's stagnation.
Playing with your iPad too much will make you go blind you know!
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princeton said:
tekgun said:marioestrada said:MS is so irrelevant now they weren't even invited to the Obama technology meetup a few months ago: [link]
They have become a commodity and most innovation comes elsewhere. I really believe Ballmer is the main reason for Microsoft's stagnation.
Playing with your iPad too much will make you go blind you know!
People who buy ipad's are blind to begin with.
Yah MS is totally irrelevant. You can tell from the percentages on the steam hardware survey and the fact that the world moved over to OSX.
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I don't know if Blamer is a charismatic manager but if I judge from the good quality of Microsoft products (like windows 7 and office) it's sure that he is at least a very good manager.
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I don't know if Blamer is a charismatic manager but if I judge from the good quality of Microsoft products (like windows 7 and office) it's sure that he is at least a very good manager.Right, now if M$ could only get him to keep his mouth shut.
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MS is so irrelevant now they weren't even invited to the Obama technology meetup a few months ago: [link]
They have become a commodity and most innovation comes elsewhere. I really believe Ballmer is the main reason for Microsoft's stagnation.
Yikes!...FaceBook,Twitter, and Netflix?...really?
So not being invited to photo-op for the President of the US means you are "irrelevant?"
Did you happen to make note of who WASN'T there beside MS?
As far as real innovation, most of this crew doesn't even make the first cut.
Had it crossed your mind that it is much more plausible than possible that this list is in direct correlation to the size of the election/re-election donations they made?
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Exactly,, and people forget that Bill Gates is one of President Obama's advisiors. Microsoft already has an inside with the Gov. Did you see the computers they were using when Bin Laden was killed? They were all using HP Envy's running Win 7. Not Macs, not Tweeting, not running SQL on Oracle, or playing Farmville on Facebook. Wake up people. With that said I do believe that Ballmer should go only because this will only be adistraction for the company and no one has confidence in a company that the public wants to see its head fail. Ask Rick Wagoner and Bob Nardelli. Just saying
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marioestrada said:
MS is so irrelevant now they weren't even invited to the Obama technology meetup a few months ago: [link]
Oh brother, cue eye roll
People, being liked doesnt equate to being good at your job
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Tekkaraiden said:
Well they have let quite a few good ideas/products fall flat, maybe it is time for a change.
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Don't mess up windows phone!
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