Monday, December 8, 2008

Microsoft requires New Plan

Shareholder activism has grown substantially in its influence. For numerous years shareholders where required to idly observe management execute poor strategies and expereince poor performance. However, through shareholder activism hedge funds and individual shareholders are effecting change at poor performing companies.
In 2004 Steven Ballmer, the CEO of Microsoft announced a strategy of utilizing cash for stock buybacks. Microsoft according to Investor Relations has deployed $115 billion in stock buybacks. Despite this massive spending, Microsoft shares have continued to languish.
In 2008, Mr. Ballmer offered a 65% premium valued at $45 billion to acquire Yahoo. An analyst with Goldman Sachs stated this was perhaps Microsoft's most stupid move in its history. Numerous Microsoft shareholders where oppossed to this strategy. Mr. Ballmer has lost shareholders confidence.
During Mr. Ballmers tenure he has engaged in massive overspending, poor execution of strategy and has failed to articulate to shareholders a long term plan. Mr. Ballmer has indicated intentions to continue deploying tremendous amounts of capital towards stock buybacks.
It is imparative that Microsoft examine its strategy and adopt a new proposal. Failure to adopt a new proposal will result in the share price continuing to languish.
We have created a "New Strategy" for Microsoft. The strategy involves utilizing its cash and net income to accelerate growth. The company is currently limited with its growth capacity within the PC and software market. Our "New Strategy" incorporates expanding into new markets to propel growth and shareholder value.
Our "New Strategy" involves deploying less then Microsoft's proposed $45 billion to acquire Yahoo. Our "New Strategy" involves Microsoft deploying approximately $30-35 billion to acquire two companies. The strategy will enable Microsoft to acquire two companies that according to 2007 reports generated a combined $260 billion in revenue. Microsoft can deploy less than its Yahoo bid and acquire companies that will enable Microsoft through combined operations generate over $300 billion in annual revenue and approximately $30 billion in net income.
It is imparative that Microsoft adopt a "New Strategy". We are currently seeking to rally support from frustrated shareholders to effect change. Microsoft has $25 billion in cash and generates $17 billion in net income. However, for "long-term" it has failed to create shareholder value. It is time that shareholders take action and demand a "New Strategy" that will create vision and shareholder value.
If you are a Microsoft shareholder and are frustrated with Mr. Ballmer and Microsoft's poor performance, we are seeking your support. Shareholders through activism have the ability to effect change. Now is the time to effect change at Microsoft.
We can be contacted at

1 comment:

Anonymous said...

Congratulations on your new blog. Those Microsoft Subnet articles are well done. Your latest post is shorter and easier to follow as well. Needs a spell check though.