Microsoft Shareholder Wants Steve Ballmer Out

11:50 AM - May 26, 2011 - By Kevin Parrish - Source : Reuters

A big investor in Microsoft stock is asking board members to replace Ballmer as CEO.

While speaking at the annual Ira Sohn Investment Research Conference in New York on Wednesday, Greenlight Capital president David Einhorn said it was time for Microsoft CEO Steve Ballmer to step down and give someone else a shot at leading Microsoft into a fruitful future.

Calling Ballmer's continued presence "the biggest overhang on Microsoft's stock," Einhorn compared Ballmer to Charlie Brown, Charles Schulz's nearly-bald cartoon protagonist in the Peanuts comic strip. Brown suffers from a "permanent case of bad luck," typically losing at everything he does whether it's baseball, football or landing a kiss from the red-headed girl.

“Ballmer’s problem is that he’s stuck in the past,” Einhorn said. “He’s allowed competitors to beat Microsoft in huge areas, including search, mobile-communications software, tablet computing and social networking. Even worse, his response to these failures has been to pour tremendous resources into efforts to develop his way out of these holes.”

Einhorn's call for change is backed by a virtual standstill in Microsoft's market value over the past ten years as the Redmond company failed to attack new mobile computing and internet markets. As of Tuesday, Microsoft was overtaken by IBM in market value for the first time in 15 years. Apple also shot past Microsoft last year, taking the crown as the world's most valuable tech company.

Greenlight Capital, a New york-based investment management firm (hedge fund) which has $7.8 billion in assets as of January 1, has been a recent buyer of Microsoft's stock, and currently holds about nine million shares, or 0.11-percent of the company's outstanding shares. But according to Reuters, the firm may actually lose money on Microsoft if the company continues to flatline in value, reporting that an investor who dumped $100,000 into Microsoft ten years ago would now have about $69,000.

Ballmer is already aware of Microsoft's position on the mobile sector and how its shortcomings have hurt the company's image and market value. Just last year he took a hit in the wallet after the board docked some of his potential bonus for falling short. He even apologized for Microsoft's late start on Monday while speaking at the Japanese Developers Forum.

Microsoft's CEO is the company's second biggest shareholder at nearly 4-percent, or more than 333 million shares. Co-founder and Chairman Bill Gates has a 6.7-percent stake, or more than 561 million shares. Ballmer succeeded Gates as CEO back in 2000, about the time when Microsoft stock began to flatline in value.

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matt_b 05/26/2011 10:26 PM

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He's not the only person thinking this........

legacy7955 05/26/2011 10:38 PM

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YES! Ballmer is a charlatan and buffoon collecting outrageous sums for contributing NOTHING of value .

Bring back a REAL GEEK, like Paul Allen or Bill Gates!

These guys are real innovators.

scuba dave 05/26/2011 10:39 PM

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matt_b :
He's not the only person thinking this........

Agreed.. Based on his performance as CEO.. It's no wonder Apple is gaining in popularity.. He, and the direction he has been taking/trying to take Microsoft has missed the mark time after time..consistantly. Yeah, I'm kinda tired of my MS stock doing nothing. Bring in a new bull. One that can make Microsoft what it once was, and more.

illo 05/26/2011 10:40 PM

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yeah i agree pretty much 100% microsoft was the big guy of the 90's since then its kinda been late to the game on everything they produce, with the exception of the kinect.

hoofhearted 05/26/2011 11:18 PM

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Judguh 05/26/2011 11:39 PM

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-2

sykozis :
Windows costs $100 for "Windows 7 Home Premium" and $140 for "Windows 7 Professional"....This price includes Microsoft Security Essentials, Windows XP Mode (for Windows 7 Pro and higher), and all updates/service packs that Microsoft releases. Last check, Apple's OSX was also $100-$150....but requires that cost per revision, unlike Windows.

Judguh 05/26/2011 11:42 PM

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-1

This Comic sums up that...

robochump 05/26/2011 11:54 PM

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Ballmer is fat and happy and over-paid. He should have stepped down 5 years ago and MS is currently in a business as usual state and no longer innovative but playing follow the leader.

ProDigit10 05/27/2011 12:14 PM

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kick the monkey out, and get all your money back

FloKid 05/27/2011 12:36 PM

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He was just a little to late on the band wagon, just like the rest of us lol.

Anonymous 05/27/2011 12:45 PM

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Unfortunately it is true...his statements is a testament that he is not in the present and needs to be replaced...and soon.....Next up, RIM......

soundefx 05/27/2011 2:04 AM

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No wonder he and the real brains behind microsoft couldn't get along. You can't win against a fool....

Swindez95 05/27/2011 2:15 AM

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I agree, get rid of him, while I don't usually like to support a company that has such a monopoly as M$ does over the PC world. I do agree with everything that was said in the article. M$ needs someone who is headstrong into making new and innovative products. Seems like that's all M$ has done in the past 10-11 years is simply revise products to look better, not necessarily perform any better or come out with a revolutionary product like they did in the 90"s.

badaxe2 05/27/2011 2:43 AM

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He always struck me as a guy that should be coaching football vs. heading a tech giant like Microsoft. Windows XP and 7 are the only things they've done right in the past decade. Then there's Xbox which ultimately, no matter how you slice it, cannibalizes the PC market in a number of ways. It's time they start doing more than seeing what other people have been successful in, then throwing a bunch of money into it with a "me too" mentality.

fir_ser 05/27/2011 5:06 AM

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Microsoft needs to hire someone young and ambitious, someone who has a business mentality and a comes from a technology background.

pythy 05/27/2011 5:38 AM

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Maybe Microsoft should do what Apple did with Jobs, get Bill Gates back

eddieroolz 05/27/2011 6:46 AM

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-1

I personally don't mind him at the helm. He has had his share of successes - Windows 7, the takeoff of Bing just 2 years after its introduction and deals with Nokia for WP7. Sure, some may focus on the fact that WP7 came very late to the game, and some may argue that Windows 7 was a mere a polish of Vista.

Still, I think these things wouldn't have turned out the same without Ballmer.

izmanq 05/27/2011 8:04 AM

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Swindez95 :
I agree, get rid of him, while I don't usually like to support a company that has such a monopoly as M$ does over the PC world. I do agree with everything that was said in the article. M$ needs someone who is headstrong into making new and innovative products. Seems like that's all M$ has done in the past 10-11 years is simply revise products to look better, not necessarily perform any better or come out with a revolutionary product like they did in the 90"s.

actually no revolutionary product, they stole the ideas from others at 90s

neiroatopelcc 05/27/2011 11:31 AM

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I don't think a different ceo would have done stuff that much different.
The reason for microsoft's situation is the internet really. It's too easy to find alternative products now compared to 15 years ago. I mean 15 years ago I didn't know you could pick between msdos and something else (except novell, and I wasn't suicidal). Now you know that you don't need a hotmail and you don't need an xbox and you don't need a windows phone (though I have one). Without the internet, things were so much better for microsoft. Ignorance paid their bills.

lofty_ninja 05/30/2011 6:08 PM

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Blatant uninformed Microsoft hate makes you look ignorant and belligerent. Einhorn is an ass, he got it right dumping Lehmann shares before they crashed and now everyone thinks he walks on water, but he's been very wrong before. Also why would he buy Microsoft shares that have hardly moved in five years and then bitch about them? They've been paying out great dividends for over a decade now but have been stagnant for ages - this is hardly Ballmer’s fault, COME ON. The biggest thing hurting their share price is the fact that Bill Gates has been dumping his shares for aaaages now, a million here a million there, as he ramps up his philanthropic efforts. Ousting Ballmer is not going to help that (duh), and hopping on the Microsoft hate bandwagon achieves... what exactly?
No new innovative products? Xbox (console/Xbox Live/Kinect) anyone?

Also Apple aren't Microsoft's major concern - they are and always will be a niche product market. HIGHLY successful in their niches, but no threat to Microsoft's ultimate survival - that would be Google. And that 'sinkhole' Bing? Well that's Microsoft taking on the real threat. And for a company that was late to the search party (because search wasn't their focus), they’ve done incredibly well to get Bing where it is today, how many other search engines (Chinese copycats aside) have even a tiny presence? None.

I love my Xbox, I love Win7. I also love my iPhone, and use Google religiously. Microsoft are good at what they do and they’re getting better at things they don’t. To wail on Ballmer because a hedge-fund cowboy says so is stupid. What does he know about tech anyway?
Go Ballmer. At least he gets genuinely excited about his products.

lofty_ninja 05/30/2011 6:08 PM

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lofty_ninja 05/30/2011 6:09 PM

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Awesome, double post >.>

kkiddu 05/30/2011 7:49 PM

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Let's compare Ballmer's performance with mine:-

->He missed out on social networking revolution
-So did I.

->He missed out on the tablet revolution.
-So did I.

->He missed out on the smartphone revolution
-So did I.

->He earns millions.
-I don't.