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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.
http://finance.yahoo.com/echarts?s=MSFT+Interactive#symbol=MSFT;range=my
Just look at that chart. Look at it, guys. It's been down and flat since 2000. Yes, that chart is split-adjusted. All Y! stock charts are split adjusted. If you want growth, Microsoft is not where you want to be.
And the outlook is not encouraging. Just look at Windows 8.
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BMO
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
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.
Only the dumb money is left.
Or the safe money. Not every investment needs to be a double-or-nothing crap shoot. I'm sure a lot of people who invest in MSFT also invest in AAPL or GOOG, but for different reasons. I'm sure there are even lots of people who use a Mac daily but still have money in MSFT; it's really all between them and their financial advisers, and has little to do with Windows vs. Mac OS X.
Breakfast served all day!
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.
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BMO
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.
Oh, no... You misunderstood me. Milking the Windows and Office cows until they're dead is just what I want him to do. I don't want him to have a vision for the future. I don't want him to grasp the significance of the transition to mobile. He thinks XBox is a huge win, and that's just what I want him to think. He thinks Windows Phone and Online Services Division have got a chance in Hell, and I'm OK with that. He probably thinks he's going to make something useful out of Skype. He's going to anchor all "innovations" and acquisitions with "business drivers" until they won't fly. There's no danger he's going to "get it" so I hope they keep him until the end. When your opponent is making a mistake, don't interrupt.
To me this Microsoft debacle is a distraction from the potential progress we could have had these past three decades. Microsoft's goal isn't innovation, it's control of innovation. The prevention of innovation they don't control is Microsoft's goal, and they were great at it under Gates but less so under Ballmer. They've done so well with this that they're now introducing features we had 30 years ago in Unix, and being lauded for it. Their current patent trolling is just the chancres of a much deeper disease. Fortunately for us and unfortunately for them, the innate creativity of people is a force that can be slowed but not stopped. Eventually a way is found.
With people Microsoft's goal seems to be to destroy morale as fast as possible. Their forced ranking system informs one employee in five that he's on the way out - some say two in five. You can only watch that for so long before you know that one day they come for you no matter what you do. Microsoft only hires people good at math so let's do the math. If the odds of you surviving the next year at Microsoft are 0.8 and the distribution is totally random then your odds of surviving 20 years is 0.8 to the 20th power, or one in a hundred. But we all know the distribution isn't random. Most everybody has in their life a bad year and nobody knows they're not going to have one with divorce, the loss of a loved one that drives you to depression, physical illness, ordinary loss of focus, the slings and arrows of outrageous fortune that induce you to produce less than your peers - no matter how good you are. Even if you don't have a bad year the currently rumored "Young Up Microsoft" program tilts the scale from "insanely difficult" to "impossible". So after about your third year there you know that this isn't a career path that leads to retirement. That shifts the personal goal of employees from "do what's best" to "get what you can before you're canned". Since new-hires have a well-known "grace year" because otherwise the hirer would suffer, for some segment of the new hires this translates to "don't get caught scrapping the walls for copper." Obviously this internal strategy served the short-term bottom line at some point in the past and is now a cultural anomaly like cargo cults but the rest of us eventually benefit so I hope they don't change it.
Microsoft's core products are Windows and Office. An operating environment and a suite of basic applications. The operating environment isn't as secure and robust as many we had 30 years ago, and does the same thing it did then: provide an environment for applications to run in. The suite of applications isn't even organic - they bought them all - and hasn't really changed in productivity in fifteen years. There are only so many ways to put glyphs on a page and do a mail merge. The spreadsheet feature wars ended sometime in 1989 when every spreadsheet had more features than three sigmas of users would ever access. Databases and presentations took a little longer - and to be fair the features they didn't buy there they outright stole. Microsoft won the office software wars not by making better software, but by ensuring that competing software wouldn't run well on their OS - and when they won, they stopped giving more value. This is being worked around by various
Help stamp out iliturcy.
Yes, the shares are "extinguished." So all the remaining shareholders now own a larger percentage share of the company, because there are fewer shares in existence. I just sold a bunch of shares back to a company... it was somewhat handy because they gave preference to odd lots (had 84 shares) so it helps to "clean things up" a bit. Also, they paid above the market rate (which didn't quite jump to the buyback value because they did not buy an unlimited number).
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.
That's understandable. if I had to listen to either of them for more than 30 seconds I'd chew my own toes off.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."