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Microsoft Stock Drops 11% In a Day
Taco Cowboy writes with news that Microsoft's stock price dropped over 11 percent yesterday. The selloff was the biggest since 2009, and during the day the price was down more than 12 percent at one point, making it the biggest single day drop since April, 2000. Analysts believe the drop was due primarily to the company missing its quarterly earnings projections in addition to taking a massive, $900 million write-down on unsold Surface RT tablets. "Microsoft’s decline is both a consequence of the changing dynamics of the tech world and the incredible surge in its stock price this year. Shares in the maker of Windows had rallied nearly 30% this year, leaving both the broader stock market and the technology sector in the dust. It was, it seemed, Steve Ballmer’s year. Until Friday. The sell off was sparked by fears over the declines of the PC market. Gartner data show PC shipments fell for the fifth consecutive quarter in Q2, this time tanking 10.9% to 76 million units. Being the world’s largest software company, 'over 80% of its revenue and nearly all of its profits continue to be derived by its ubiquitous Windows OS, its server business (Windows Server), and the business division (Office),' according to UBS. And indeed that decline in the PC industry is hurting the company’s bottom line."
The stock market isn't based on the real value of a company anyhow. It rarely involves evaluating the technical expertise, the research and development, the long term product development plans, the current or future rational profit projections of the company, or anything like that.
Instead, it's now a bunch of automated systems buying and selling at a furious rate based on statistics and very small margin profits for the trades.
In other words, legalized gambling with the biggest players gaming the system to their advantage.
When I think about how solid or worthy a company is, the last thing I consider is their stock price.
I do not fail; I succeed at finding out what does not work.
Is about the trust. Their closed platform and their "we respect your privacy" internet services busted badly. Why anyone in the world will put their intelectual property, privacy, business proposals and so on in an environment that leak their information by design? That directly lies their consumers saying that their information is safe because they encrypt them? That will keep remote vulnerabilities intentionally open for a year or more, so can be exploited by NSA and associated private companies?
The NSA helped more to popularize linux on the desktop than all the open source community with its practices.
Hindsight is 20/20. Here are a few things Microsoft should have done:
Instead it's more of the same old Ballmer monkey tricks.
Somewhere it helps to be ahead of the curve and not chronically behind it. Listening is good, yes, but who was Apple listening to when they created the iPhone? MS completely lacks anything close to that kind of vision or innovation. They wait for others to innovate, see if its making money, then jump in and try to grab marketshare. That worked in the '90's. It doesn't work now. A moron could see the RT was DOA.
I know you're being facetious, but I think it's worth sharing a few reasons why this reorganization really is a bad idea in the long-term. I'd write something up, but someone who has firsthand experience working inside both Apple and Microsoft (he only left Microsoft a few weeks ago, in fact) has already provided a series of insightful essays on the issue, explaining why this sort of organization works for Apple but not for Microsoft:
Functional vs. Divisional organization structures
Why functional doesn't work for MS
Microsoft's failure to recognize what role their products should be playing
I feel like I'm shilling for him, but I really do think that what he's written on the topic is a must-read with a lot of good points.