Seeking Alpha

Microsoft strikes "cooperation agreement" with activist, doubles storage for Exchange/Office 365

  • Microsoft (MSFT -0.3%) signs a "cooperation agreement" with activist hedge fund ValueAct, which owns a 0.8% stake in the company. The deal provides for regular meetings between the $12B fund's President, Mason Morfit, and Microsoft directors/management. It also gives Morfit the option to join the board after the company's annual shareholder meeting in Nov.
  • It has been speculated that ValueAct may have had a part in agitating for Ballmer's exit.
  • On the product side, Microsoft will double the storage space for Exchange Online and Office 365 to 50 GB. Earlier this week, Microsoft more than tripled storage capacity for SkyDrive Pro to 25 GB.
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Comments (6)
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Not sure I like this development, especially in the technology sector, first we had the hedge fund guy posting Twitter messages about his meetings with Tim Cook at Apple and now we have this.

     

    I just see this leading towards more short-sighted quarterly earnings leadership which has the potential to destroy long-term growth and intellectual capital.

     

    Corporate raiders typically have no interest in long term vision they just want to get paid. Would like to see ValueAct's long term vision for the company and not just what they are doing with buybacks and the dividend.

     

    If you're going to take action on something and say why it's not working you need to present your own solutions for something that will work.

     

    Copycat Apple mobile-centric strategies don't count either, that is a 2010 strategy that has already played out.

     

    ValueAct what are your forward-thinking ideas?
    30 Aug 2013, 06:42 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (884) | Send Message
     
    "Not sure I like this development, especially in the technology sector, first we had the hedge fund guy posting Twitter messages about his meetings with Tim Cook at Apple and now we have this."

     

    The guys from ValueAct are a class act; as an MSFT holder, I'm very happy with this development.
    30 Aug 2013, 07:50 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Transcipts appreciate your vote of confidence in them, I hope to see some guidance on what they have planned, and not just "give me all your cash Tim," that we saw from Carl Icahn
    30 Aug 2013, 08:30 PM Reply Like
  • Ruffdog
    , contributor
    Comments (1957) | Send Message
     
    I am a retired long time MSFT investor who has reinvested my dividends. ValeAct bought MSFT not only for the dividend but to see the total return of the MSFT beat the S&P 500. I agree with them. MSFT is sitting on $78B of cash, give me some!
    30 Aug 2013, 09:00 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (884) | Send Message
     
    Derek,

     

    Thanks for the reply; I would read this and watch the videos:

     

    http://bit.ly/17vUKdi

     

    I think this is a very important development for a company like MSFT that has the stigma of being set in their own beliefs and uninterested in what outsiders think. Life after Ballmer, even with the simple improvements of intelligent capital allocation and increased focus on the enterprise (which will likely mean reduced R&D spend from levels that currently blow GOOG & AAPL out of the water), should push MSFT to $40 and beyond in a few years time (in my opinion).
    31 Aug 2013, 10:18 AM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Thanks for the links, looks promising, I liked that they are philosophically opposed to the traditional hostile activist approach.
    31 Aug 2013, 06:00 PM Reply Like
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