Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Microsoft Corporation (MSFT): Who’s Calling For a Breakup?

Microsoft Corporation (NASDAQ:MSFT) has developed itself into quite a large, diverse company over the last 30 years. The company has made a living in the enterprise behind its server and Windows services, and has maintained its hold in many environments thanks to its Microsoft Office suite of products, which are used in both consumer and corporate environments. But with all of the growth and development of the company, might it be time for it to streamline its operation?

Microsoft Corporation (NASDAQ:MSFT)There is one analyst who wrote in a recent research note that it might be time for Microsoft Corporation (NASDAQ:MSFT) to consider breaking itself up. Now this is not a new call, by the way – similar calls for breaking up Microsoft grew very loudly about a decade ago due to considerations that because Microsoft was so diverse that it was losing its innovative edge and perhaps needed to focus on what it did best and shut down some of the other pieces. Ten years later, that call is being renewed, and was made public by analyst Rick Shurland of Nomura Securities.

Why does there seem to be a push? There seems to be some waves around activist hedge fund ValueAct, which bought a mammoth $2 billion stake in Microsoft Corporation (NASDAQ:MSFT) in April. ValueAct has a reputation for guiding changes with companies, including getting people on the board of directors who would support changing the status quo of the company.

Shurland wrote in his note, “We think there is likely to be a more substantive catalyst for change than we have seen previously in the history of the company. There may be a more receptive group of frustrated shareholders to leverage in an effort to drive greater realization of shareholder value at Microsoft.”

How might this breakup look?

One of the suggestions made was to see Microsoft Corporation (NASDAQ:MSFT) focus more on its core of the business model, which for Shurland would mean selling off the Bing search engine and Xbox gaming and home entertainment division. The note also maintains that Microsoft could streamline other divisions, lay off some workers and increase its dividend to 6 percent – which would be the highest among its tech counterparts. Another model suggested breaking the company into two divisions – one is a consumer business that focuses on Office, Windows and Xbox, and the other is a enterprise entity that develops Windows Server, Azure and Sharepoint, among others.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.