As Tina Fey might say, "What the What?"
Look, I get it. Microsoft always does great business when it comes out with a new version of Windows. Windows 8 is the latest-and-greatest, a Windows that works great on a tablet, a smartphone OS that Apple won't sue. Expect millions to be served this Christmas.
But in terms of the stock this has been the worst reaction to an imminent release yet. I bought in a year ago, expecting a pop as the launch date approached, but I've had to satisfy myself with an 80 cent dividend. Meanwhile the 10 Apple shares I bought about the same time have jumped more than 40%. For those scoring at home, that's $2,000 from the 10 Apples, $80 from the 100 Microsoft.
The news is getting worse. While some analysts are now downgrading the stock, it turns out the company's 30-year old "ecosystem" way of doing business has been compromised. Since anyone can turn out a PC, some have been turning out PCs with malware, meaning users are poisoned before they get the thing out of the box.
Apple, by contrast, holds its suppliers and contractors in a tight grip and consumers know all their Apple products came from Apple. It's a stark role-reversal from the PC days when Microsoft benefited from having a lot of partners while Apple suffered from it.
Almost without wanting to Microsoft is becoming a computer security company, but all that money is going into defending what it has put into the market, while its products and services in security are restricted to the server area.
Microsoft has not really capitalized on its main success, the Kinect interface, while the Xbox, while leading its market, is being lapped by social and mobile games played on Apple equipment.
The new Microsoft Server software is focused on cloud, supporting a version of its Hyper-V hypervisor. But VMware (NYSE:VMW) dominates that market, according to Nexenta, and their lead is only growing with time.
So why should I pay almost as much for $1 in MSFT earnings as I pay for AAPL earnings? I'm planning on holding my MSFT stock for another few months, but if I don't see some results soon after the official October launch I may have to just throw in a bad hand.
Disclosure: I am long MSFT, AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.