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

Dividend Stock Alert - Billionaire Robbins' Top Dividend Idea With 70% Upside Potential

Get Paid 3.5% Per Year While Waiting For The Stock Appreciate 70%

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!