Famed investor backs away from web-obsessed Microsoft
Accuses firm of 'Google-envy'
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A well-known hedge-fund manager has hit out at Microsoft’s “overaggressive and almost panicky” attempts to plump up its online investments.
David Einhorn, president and founder of Greenlight Capital, yesterday accused Microsoft of suffering from “Google-envy” and said he was giving up on investing in the software giant until it learns to play ball. The scolding came in the firm's latest report to shareholders, according to Silicon Valley Insider.
We wanted to share some thoughts on Microsoft (MSFT), which we closed during the quarter. We believe that we purchased the shares at an attractive time, and for a good while the investment worked nicely. As has been our habit of late, we overstayed our welcome as the shares peaked after the company announced a very good September 2007 quarter.
Since then, management has acted in an overaggressive and almost panicky fashion regarding its online offering. First, it sought to acquire Yahoo! and then after that failed, it announced extremely high internal investment requirements to pursue this 'huge' opportunity (read: 'Google-envy'). We doubt the opportunity is what they say it is and wish MSFT focused on its core strength: software.
The CEO is a very smart and very wealthy man. Perhaps, he is so wealthy that he has bigger ideas and aspirations than making MSFT’s shareholders wealthier. We’ve given up on MSFT for now as we feel better investing in companies where management at least appears to be trying to work for shareholders.
Many will likely agree with Einhorn's grumbles about Microsoft's failed efforts to out-Google Google, while others have lambasted CEO Steve Ballmer's online vision as short-sighted.
Einhorn famously fingered the Lehman Brothers debacle months before it collapsed, questioning the accuracy of accounting and warning that trouble was brewing at the brokerage firm.
He has felt the pinch from the deepening financial crisis hitting the world's banking systems. In September his company suffered a huge loss when regulators at the US Securities and Exchange Commission banned short selling of more than 900 financial services stocks.
Meanwhile, Microsoft shares have tanked over the past few weeks forcing Ballmer to admit on his recent tour of Europe that no one was safe from the dollar meltdown on Wall Street.
"Financial issues are going to affect both business spending and consumer spending, and particularly... spending by the financial services industry," he said. ®
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COMMENTS
@Jesse
Sorry I didn't mean to imply that he was soley responsible for the financial meltdown, by all means apologise to him for me next time you speak to him.
Thanks
M$ shares tank....
well, when they make a lame duck like Vista which in the end they can barely force OEMs to sell, and eventually round out their core offering by prettymuch abandoning it and annoucing Windows 7 will be The One To Watch™, is it any wonder people are going "wtf, gimme my money back".
Microsofts bizarre and idiotic web investment is laughable; they're not going to be able to compete with google unless they throw googles revenue and capital at it, and fundamentally change famously industry-poor working conditions for basic staff out of the window. Live! search! its a gogle compe... wait, not using it? um, ok. Gmal gives you 2 gig? you can have 250meg on hotmail! eventually. um. wait a sec. How abut that aero desktop? whaddaya mean theres a class action lawsuit over the action we took to force OEMs to lie about how well their hardware could run vista?
whats next, competeing with Sun and IBM for Big Boxes? maybe making chips of its own? how about Microsoft Music or Microsoft Bookstore? we'd laugh openly if MS tried any of these things, but for some reason competing wth google on its own turf with a fraction of the funding and understanding is supposed to be tolerated by shareholders in a marketwhere they stil own an effective monopoly on Operating systems?*
Ballmer : GTFO.
XP SP3. 98 interface, NTFS file system, NT toolset in the background if you need it. perfect. why would I want to fuck with that? the Vista-exclusive content? which was... uhm, for games... Shadowrun? yeah. i remember how people rushed out to buy that lemon, too. XD
IT? because I think Microsoft isnt sure what it does anymore. Maybe I should ask Seinfeld?
*blahblahlinuxBSDOSX etc. m sure you're all very nerdy fanboys, but you're in a very very tiny market share. just a really vocal one. please deal with it.
Showing his ignorance
"We [...] wish MSFT focused on its core strength: software. "
Haha.
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