The catalyst is activist investor firm ValueAct Capital Management’s disclosure of a brand-new $2 billion stake in Microsoft Corporation (NASDAQ:MSFT) stock. This makes Microsoft Corporation (NASDAQ:MSFT) the firm’s largest holding, according to Bloomberg.
Why is this such a big deal? Well, Microsoft’s management troubles have been widely documented, and a change at the top could spark new life in these listless shares. ValueAct specializes in finding turnaround avenues for failing businesses with healthy fundamentals, and Redmond fits that bill to a “T.”
This could be the first sign of a major shakeup in Redmond — and a much needed one, I might add.
ValueAct has been active in the software sector lately. The firm took a 5% stake in multimedia specialist Adobe Systems Incorporated (NASDAQ:ADBE) in 2011. A year later, Adobe Systems Incorporated (NASDAQ:ADBE) announced a “standstill agreement” with the activists that would prevent ValueAct from running any direct takeover plays but also placed ValueAct partner Kelly Barlow on Adobe Systems Incorporated (NASDAQ:ADBE)’s board of directors.
Barlow immediately promised to transform the “iconic” Adobe brand. Adobe Systems Incorporated (NASDAQ:ADBE) shares have crushed the market since ValueAct became involved, and even more so since the standstill agreement was announced in December 2012.
ValueAct would love to do the same for Microsoft Corporation (NASDAQ:MSFT)’s even larger brand, and investors seem to like the idea very much. They’re voting “yea” with their wallets today.
The article Will Microsoft Stock Follow Adobe’s Market-Beating Example? originally appeared on Fool.com and is written by Anders Bylund.
Fool contributor Anders Bylund holds no position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+. Motley Fool newsletter services have recommended buying shares of Adobe Systems.
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