Microsoft Corp’s board stood behind CEO Steve Ballmer on Thursday, defending its longtime leader after influential hedge fund manager David Einhorn touched off a debate by calling for his dismissal.
The fund manager, who made his name warning about Lehman Brothers Holdings Inc’s financial health before the investment bank’s collapse, accused Ballmer on Wednesday evening of being stuck in the past, launching the sharpest attack yet by a high-profile investor against the company’s leadership.
Einhorn’s comments, which echo what some investors have said for some years in private, caused a stir on Wall Street and helped Microsoft shares climb 2 percent on Thursday to US$24.67.
“His continued presence is the biggest overhang on Microsoft’s stock,” Einhorn told fellow fund managers at the annual Ira Sohn Investment Research Conference in New York.
Microsoft’s nine-person board, including chairman and co-founder Bill Gates, supports Ballmer, a source close to the board said on Thursday. Microsoft itself declined comment.
Gates, who co-founded the software company in 1975 and is still the largest shareholder with 6.6 percent of the company’s stock, is generally regarded as the one person who could make the decision to switch management.
“Bill Gates is a ruthless capitalist. If he wanted to, he’d walk Ballmer to the door himself,” said a fund manager at one of Microsoft’s largest shareholders, who asked to remain anonymous.
Gates, who spends most of his time on his philanthropic foundation, has given no indication he is considering a change. A representative declined comment on Thursday.
Other investors acknowledged Microsoft’s stock has suffered under Ballmer, but stopped short of calling for his ouster.
“I thought the board was firmly behind Steve and the only way Steve was going to leave was if Steve wanted to leave,” said Eric Jackson at hedge fund Ironfire Capital, which sold its position in Microsoft last autumn, -disappointed the company would not lift its dividend higher.
“I don’t see anybody else on the management team at Microsoft that I think would be much better than Ballmer,” Jackson said.
Whitney Tilson, founder and managing partner of T2 Partners LLC, which holds Microsoft stock, said Ballmer might be running out of steam.
“This dissatisfaction with Ballmer, with the company, is more than baked into the stock,” said -Tilson in an appearance on financial news channel CNBC. “When you’ve been the top dog so long, how do you become hungry again?”
Microsoft — the largest US company by market value in the late 1990s — has been overtaken by Apple Inc and International Business Machines Corp in market value and is no longer seen as a dominating force in technology after a failure to capitalize on Internet and mobile markets.
Before Thursday’s gain, the stock had been down 6 percent in the past two weeks after Microsoft agreed to pay US$8.5 billion for Internet phone service Skype, a move that mystified many investors.
Einhorn said it was time for Microsoft to consider strategic alternatives for its money-losing online business, which has so far failed to win share from Google Inc.
“Clearly, some people are calling for a change,” said Sid Parakh, analyst with McAdams Wright -Ragen. “If you look at the financial performance, that’s been fine. But I think the issue is broader than that.”
“If you look at search, mobile, tablet, these are areas they should have been investing in, and they have — but they weren’t able to get it right,” he added.
“If there was any reason to believe the board was not with Steve, it would be a different situation. But the board seems to be behind Steve,” Parakh said.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS