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Microsoft Shareholders Unhappy After Annual Meeting
Kozar_The_Malignant writes "Microsoft shareholders left today's annual meeting grumbling about the 15 minute Q&A period with Bill Gates and Steve Balmer and the lack of any real specifics about corporate direction. Many shareholders are concerned about Microsoft's static share price over the last decade."
Simple solution to a simple problem. SELL THE STOCK.
Doesn't MSFT pay dividends? You can't just look at the chart of the stock price. The fair way to construct such a chart would be a graph of an investor's money assuming he reinvested the dividends.
http://www.geekwire.com/2011/microsoft-shareholder-meeting
I would have left too if those were the best answers I could come up with for those questions.
That makes Microsoft a blue-chip stock, like GM or IBM. They are not a bubble rally pump and dump stock. The ultimate value of a company is not what a wall street casino game of money chicken assigns to it, and listening to the gamblers is hardly the course that will find improvement.
Static share price for the past decade, but:
revenue:
2000: 22.96 billion
2011: 69.94 billion (ms ends their year on 6/30.. so this is 6/30/10 - 6/30/11)
profits:
2000: 9.42 billion
2011: 23.15 billion
Yep.. shareholders are stupid. Not Microsoft's fault they don't want to reward their success.
2000 income announcement
2011 income statement
Dividends are not growth.
Learn stock basics.
I'm an investor, I care about DI/DO - dollars in / dollars out. Dividends matter. Give me a flat stock price and reliable 20% dividends and I don't care at all about growth.
MSFT is a poor choice just because other companies have performed better? That's a little rash. There are plenty of other companies that have performed a lot worse, and holding a diversified portfolio is always a good idea. (You may remember a time when AAPL's chart was not so stellar.) Also, as other people have noted, MSFT pays dividends, which may not be "growth" but are definitely returns on the investment. Neither GOOG nor AAPL pays dividends -- in fact, both seem quite adamant about not paying them -- so you better hope those growth rates hold.
Breakfast served all day!
The fact is that Microsoft is very profitable. They make money. Lots and lots of money. The problem is that they treat their investors and their customers like shit. It doesn't matter though, because they're microsoft. AT&T was just like this before they were broken up. They treated everyone like shit because they could and microsoft, the great monopoly of our day does the same. Monopolies don't have to act like other companies because.....they're monopolies.
In my mind, the last real Microsoft innovations that happened were in the year period between late 1995 and early 1996. That is when Windows 95 came out and Windows NT 4.0. Windows 95 had a lot of things going for it - it had Internet capability included, so people didn't have to go through a rigmarole with Hyperterminal to download Trumpet Winsock from somewhere via X-modem. It had a nice, Mac-like GUI. It was nice - they even had Mac-like touches, like hiring Brian Eno to do the sound for when the computer started, a launch campaign with a Rolling Stones sound etc. Insofar as NT 4.0 - it was the first Windows server which wasn't total garbage. I had to administer a NT 3.51 server for a while, to my chagrin. 4.0 wasn't great, but it wasn't complete garbage like previous efforts. NT 4.0 also introduced the Terminal Services Client, later called Remote Desktop.
SQL Server began coming out before any of this. I don't really like Exchange Server or Outlook, but they came out in 1996 and 1997 respectively. What has Microsoft really come out with since then? They completely missed the boat on smartphones and tablets - they are less than 1% market share for both markets. I just finished reading Job's biography - he mentions that Microsoft had been working on tablets forever. He blames their focus on the stylus, and compatibility with the existing Microsoft monopoly, I mean framework, as the drawbacks to it. Microsoft just seems to be unable to anything new. They started by porting an existing product, BASIC. Then they ripped of CP/M - some say in a straight pirate-like fashion. Then they rip off Apple's Mac interface (which Apple themselves ripped off from Xerox). Microsoft is great at copying others ideas and doing all the back end, support, marketing, licensing business stuff, they are not so great at inventing stuff. A then much smaller company like Apple was able to eat their lunch in the tablet and smartphone space. Google bought Android, and helped it grow to where it now owns smartphones, and is doing respectably on tablets, at least more respectably than Microsoft.
Microsoft has just been resting on its monopoly and sitting on its laurels. They put out garbage that technicians hate to use, but are sometimes forced to. With Windows 95, I used to get a CD where I could reinstall Windows if I wanted. Then they started that horrible OEM recover CD, where you couldn't just fresh install Windows like you wanted to - like you can with a CD of Linux or FreeBSD or whatnot. I mean, they took a step backwards, to protect themselves from piracy - a concern people making Debian CD's have no concern about. Other people are out innovating, they are at work crippling your ability to do things you were able to do with previous installations of Windows.
Yield is 3 percent, being generous, and this is nothing when considering the growth of other companies in the same sector - I get modded down for pointing this out.
Stock price is down and flat, especially considering other companies in the same sector. - I get modded down for pointing this out.
There is no sign of this changing any time soon. Windows 8 is the biggest news, and it makes everyone who is not a fanboy yawn, at best - I get modded down for pointing this out.
Yet none of the above is false. So much butthur at the truth. Don't blame me, guys, look at your god, Ballmer, the guy who is only there because of the amount of voting stock he owns. Welcome to the same doldrums that befell Apple in the 90s. Unless something serious happens, the best you can hope for is that the wind does not go completely out of the sails leaving Microsoft adrift in a Sargasso of status-quo or sinking from shipworm.
Break up Microsoft. It needs it. The profit sucking divisions need to sink or swim on their own. The company also needs to make things that people actually want, rather than view Microsoft products as "necessary evils." Apple has been doing it the right way. Microsoft, not so much.
--
BMO
Microsoft has tripled earning in the last decade, a long history of solid steady (though slowing) growth. The stock had lots of growth priced in and the stock has delivered growth. Growth is slowing. P/E of under 10, PEG .85, 3 P/S and P/B for a healthy growing company; 44% return on equity. The stock was priced for growth a decade ago and is now priced for value. And all this with a 3% dividend yield!
That's a good stock.
Anything that makes Microsoft or Microsoft shareholders unhappy is a good thing, IMHO.
Until one considers people with a pension plan, IRA, or 401K. For many of these people with the later two they don't pick individual stocks, they pick funds that are managed by a "pro". Many of these funds own Microsoft.
I really wish the Y! charts would include an option to represent present value of a DRIP [fool.com] investment at the beginning of the period.
I've been complaining to Yahoo about that for years. It's especially bad for mutual funds since they are required to make (potentially substantial) distributions each year. For example, note the sharp drops in December 2006 and December 2007 -- they have no economic significance (fund price drops by $X and shareholder receives $X in cash), but they mangle the graph and make it really hard to compare funds.
If you want growth, Microsoft is not where you want to be.
That's not what it means at all. It means if you wanted growth in 2000 Microsoft wasn't the place to be. The same may be true of Apple and Google today. That's likely the case, actually.
Microsoft have the one problem - their success. Most of it was due to luck - Corporate America chose Microsoft as the OS of choice, beginning with MS-DOS.
It had nothing to do with luck, Bill sold himself to IBM at a time when IBM was considered king for everything from a desktop computer to a mainframe, which in turn forced everyone to follow with IBM and adopt MS-DOS regardless if it was the best solution at the time.
It was a time back when "No one ever got fired for buying IBM" was still in full swing, and if IBM is endorsing a OS or even a roll of toilet paper, any business that had them, or wanted them at the time, would have followed suit.
Jim
A company with no growth paying 3% dividends and consistently losing pieces of their core markets year after year? This is a good place to sink cash for the long run?
Microsoft ten years ago, maybe. Microsoft now?
While Microsoft stock is not going up, it is unclear why. The company has, over the last 10 years, over doubled revenue and almost tripled profit. And it did this in an environment where they held 80+% of their primary market. This requires innovation and growth into new markets since you can't grow much when you already have 80+%
Looking at Apple, they have done well. Made products people want. Gained technology to product price competitive products. But the real point is that they were under 3% of the market and now are at 12% or so. Microsoft still is over 80% but the point is that growing by 9 basis points for Microsoft would be just over 10% but for apple it was 400% growth. In fact, there is no way Microsoft can grow more that 25% in their primary market as, well, that would put them at 100%, The growth potential is almost all in other markets and new technologies. Apple, on the other hand, has tons of room to grow into if they can take more market share. However, if you look at their actual financial data, it is the new markets that really pushed them forward over the last 10 years. They executed very well in identifying new opportunities and taking the risk to enter those markets at the right point.
Microsoft is currently, I believe, undervalued. Microsoft does have some very bright people and some compelling products coming, And they continue to be stable too. Not that Apple is not in a major growth spurt, but they are also valued relatively highly compared to earnings.
This line says it all:
"My granddaughters don't even know what Microsoft does."
I kid, I kid.
I hope.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
By putting the relationship between operating systems in terms of war, you demonstrate that you are not interested in actually getting my thoughts on anything and only want to make your little point.
You are welcome on my lawn.