Microsoft Corporation (MSFT): When Does 1% Equal 4%? When ValueAct Invests

Microsoft Corporation (NASDAQ:MSFT) came out of a quiet weekend, but even with many analysts and market watchers focused on the Apple Inc. (NASDAQ:AAPL) quarterly earnings report slated for Tuesday, Microsoft is getting its share of headlines Monday morning when it was reported early by CNBC’s David Faber that ValueAct Capital Management, which has about $7.8 billion in its equity portfolio, has made a $2 billion play in the stock.

Granted, ValueAct’s move is large in relation to its overall portfolio (about 25 percent), but in the grand scheme of things, it’s not a gigantic play in comparison to some of the titans of the hedge fund industry. Which makes it so interesting that as news of this transaction broke – though no SEC filing has been spotted as of yet – Microsoft Corporation (NASDAQ:MSFT) stock jumped more than 4 percent to about $31 per share, where it is holding steady around that mark several hours into the trading day.

If this sticks, it would mark the highest point for the stock in several months and puts the stock as a 15-percent gainer already this calendar year.

Based on Friday’s close, ValueAct’s move bought about 67 million shares of the company, but that is still less than 1 percent of the total number of outstanding shares in the company.

Have you heard of ValueAct? It declares its management as experts in determining undervalued stock companies and then implementing strategies with the company’s management and board of directors to increase returns on ValueAct’s investment.  The firm is most noted for its move into Gardner Denver Inc. to encourage its sale, which it did for $3.74 billion to private-equity firm KKR.

Microsoft Corporation (MSFT) Giving Apple Inc. (AAPL) a Run for its ‘Patent Money’

Might this be a precursor to some major move at the company? Microsoft Corporation (NASDAQ:MSFT) CEO Steve Ballmer has been the subject of criticism by many hedge funds and other investors for most of the last decade since he took over in 2000, and he stayed in charge despite a move by Greenlight Capital’s David Einhorn to try to push him out several years ago. And with Ballmer owning 4 percent of the company’s stock and being the pick of Bill Gates, who owns 5 percent of the shares, it would be difficult to imagine this move by ValueAct ultimately serving any significant purpose on its own.

We might have to watch Microsoft Corporation (NASDAQ:MSFT) stock over the coming days and weeks to see if ValueAct’s investment is a building block toward some bigger play by a consortium – and will that consortium amount to enough to get Gates’ and Ballmer’s attention?

Why do you think a firm like ValueAct would place more than 25 percent of its 13F portfolio into Microsoft right out of the blue? Is this a sign of more to come? We will keep an eye on this tory as it develops, but we’d like your initial thoughts in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

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 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

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!