Feeds

Microsoft share price rise is a puzzle

The analysts all seem to have different explanations...

  • alert
  • submit to reddit

Internet Security Threat Report 2014

For no agreed reason, Microsoft shares have increased in value by 14 per cent this week. There's an opinion from Michael Stanek of Lehman Brothers which noted that Microsoft is "somewhat immune from Y2K", and projects a price of 130 within 12 months. Bloomberg and Dow Jones cited "a favourable court ruling" which may be an optimistic way of describing the failure of the judge to give some reasons for decisions in Sun's action against Microsoft over Java. Bloomberg also mentioned as a reason the expected appointment of Richard Belluzzo to head Microsoft's Internet activities, but this was unrelated, according to Bill Epifanio of JP Morgan, who though the approach of Windows 2000 was more important. Steve Ballmer is on holiday and Gates is essentially out of operational matters, so the word from Microsoft is "no comment" about Belluzzo. Since he is tipped to start on 1 September, he is no doubt negotiating his contract details and reading the relevant Dummies book on the Internet, since his background is strongest in printer sales. The rise in Microsoft's share price will be bad news for head lawyer Bill Neukom, who sold 90,000 shares last week, just before the price rose. There has also been some curious activity in the Pacifc Exchange Microsoft options market, with many out-of-money calls being sold earlier in the week (essentially they are a bet that Microsoft's price will go higher). The proceeds from the sale of the calls was being spent on buying Microsoft stock, according to traders. The volatility index, which is seen a kind of fear gauge, was down 4 per cent at one point, according to a Microsoft trader. There are also mixed views as to whether there is an increased or decreased likelihood of a tracking stock to spin off Microsoft's Internet activities, to be known as the Consumer and Commerce group. Some were of the opinion that it would be a way to measure Belluzzo's performance, but whether Microsoft would be willing to entrust to him what could be around $50 billion of its $486 billion of assets is uncertain. Microsoft's Internet business showed revenue of $725 million in the FY which ended in June, but the losses are not disclosed. Another advantage of a tracker could be that it would provide a way to make expensive Internet acquisitions without diluting profits. Gates is believed to be against the tracker idea because of "implementation challenges" and CFO Greg Maffei thinks it would be expensive and complex to initiate. Of course, there could be trouble with other Microsoft staff if employees saw those with Internet options doing better - although this appears to be rather unlikely in the near future. Separately, AT&T may be considering creating a tracking stock since it scrapped a plan to create shares for its cable and wireless businesses. This could now have a tracker, with another for its long-distance services. AT&T's rationale is that investors have not valued AT&T shares sufficiently - they are down 20 per cent on their high last month. Of course, all this speculative analysis is based on an assumption that the markets are rational. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Bono apologises for iTunes album dump
Megalomania, generosity and FEAR of irrelevance drove group to Apple deal
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
America's super-secret X-37B plane returns to Earth after nearly TWO YEARS aloft
674 days in space for US Air Force's mystery orbital vehicle
10 Top Tips For PRs Considering Whether To Phone The Register
You'll Read These And LOL Even Though They're Serious
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.