Is Microsoft Corporation (MSFT) Really Corporate America’s Alex Rodriguez?

Page 1 of 2

Microsoft Corporation (NASDAQ:MSFT)David Einhorn recently compared Microsoft Corporation (NASDAQ:MSFT) to Yankees third baseman Alex Rodriguez.

From the Greenlight Capital annual letter,

In 2006 we compared Microsoft to A-Rod, which was a compliment at the time. In 2013, the comparison is still apt, but it is no longer a compliment.

The famous stock picker implied that Microsoft Corporation (NASDAQ:MSFT)’s glory days were over and that the Redmond, Washington tech giant was in decline. Should investors follow Einhorn’s advice and sell?

The CEO

Steve Ballmer has been Microsoft Corporation (NASDAQ:MSFT)‘s CEO since 2000. Microsoft shares have languished since 2000, and it is not hard to see why.

Ballmer made several severe mistakes. First, he failed to acquire Google Inc (NASDAQ:GOOG) when they offered to sell themselves for five billion dollars. Second, Ballmer failed to acquire Facebook, which is now the world’s most popular social network. Third, he missed the entire post-PC era and famously laughed at the Apple Inc. (NASDAQ:AAPL) iPhone.

Instead of focusing on the mobile shift in the computing system market, Microsoft Corporation (NASDAQ:MSFT) spent too many resources on Apple iPod competitor Zune and Google Inc (NASDAQ:GOOG) search competitor Bing, which ended up being also-rans in their perspective sectors. Microsoft Corporation (NASDAQ:MSFT) also acquired AQuantative, which it had to write down 5 years later by over $6.2 billion, and acquired Skype for $8.5 billion, which is now under assault from mobile chatting apps such as Whatsapp.

Secular Decline

As a consequence of missing those trends, Microsoft Corporation (NASDAQ:MSFT) is in secular decline and has lost its monopoly on computing platforms to Android and Apple Inc. (NASDAQ:AAPL).

Source: Business Insider

According to market research firm IDC, worldwide PC shipments were down 13.9% in first quarter of 2013 Year Over Year. IDC attributed the decline to the increasing popularity of mobile tablets which the research firm predicted would surpass total worldwide PC shipments by 2015. Since a significant part of Microsoft’s profit comes from PC’s, Microsoft’s profit will eventually suffer.

The Benefiters

As a result of Microsoft’s numerous missteps, Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) have managed to eclipse Microsoft in market capitalization.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!