Should Microsoft Spin Off Its Consumer Business?
Should Microsoft Spin Off Its Consumer Business?
Posted 11/18/2010 at 7:16am
| by Paul Lilly
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During Microsoft's annual shareholder meeting, one of the company's investors asked, "Is it time to consider breaking this company up?" This wasn't a rogue question, but a sentiment shared by some nervous shareholders who wonder if it's time for Microsoft to spin off its consumer business, according to a report in The Wall Street Journal.
"I obviously don't think it is time," Steve Ballmer said. Ballmer went on to point out that Windows and Microsoft Office are sold to both home consumers and enterprise clients.
The problem for investors, however, is that Microsoft's share price has fallen 15 percent since the beginning of the year, a tough pill to swallow considering Windows 7 has been enjoying record sales. And for the past eight years, Microsoft shares have mostly stayed around $25.
"I do understand the frustration," Ballmer said. But what investors might not understand is where this confidence is coming from, particularly as Ballmer recently confirmed plans to sell off up to 75 million shares of Microsoft by the end of the year.
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Lhot
November 23, 2010 at 12:43am
....because MS made Vista and Win 7....simple as that...both OS's are junk...they are NOT intuitive, and offer no REAL benefits other than DX11 and larger and more complete driver cab files....both of which could have been ported to XP. You dont sell what the consumer wants and you suffer the consequences.
Now I'm sure I'll get flamed for this, but it's the truth....plain and simple....XP is on 74% of the world's comps for a reason...it works and works well.
JohnP
November 18, 2010 at 2:26pm
What a bunch of malarkey. The price of a share of stock was never to be important. It was the dividends from the profits of the company that was what you were supposed to make your money from. Coca-Cola, for instance, does very well and pays good dividends. No one complains that the share stock is always the same. It wasn't until the Internet mania that this whole idea of making huge profits by buying a high-growth company's stock and selling it for a three or 400% profit. Remember, that the stock market is really a big Ponzi scheme. In order for somebody to make a huge profit, someone else has to make a huge loss or many others a small loss. There are clearly winners and losers and frankly, especially for the individual shareholder, we are usually the losers to huge equity funds, sovereign funds, and huge mutual fund companies.
Why do we have to watch companies do stupid things to bring the share stock price up? It is because of insane amounts of stock options given to the company's officers and board members. Geez.
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