Microsoft up following Nadella/Gates report; Gates might stay involved

After selling off Microsoft (MSFT +1.5%) shares in response to news Alan Mulally won't replace Steve Ballmer, investors have bid them higher following a report Satya Nadella is set to receive the nod, and that Bill Gates might step down as chairman.

Analysts and pundits generally praise Nadella's technical expertise and product development skills, as well as his success at creating profitable/growing enterprise businesses. Microsoft's commercial reporting segments accounted for 65% of its gross profit during the December quarter.

At the same time, some worry Nadella won't make the kind of sweeping changes (major cost cuts, the shedding of unprofitable units) that were expected of Mulally, and have reportedly been considered by Stephen Elop.

Meanwhile, Kara Swisher reports that while Gates' resignation as chairman "seems likelier than not," he'll nonetheless remain on the board and be "spending a lot more time at the company once Nadella is approved."

She also reports Ballmer appears set to leave Microsoft's board once his current term is up.

Top investors (including ValueAct?) have reportedly been worried Gates would prevent Microsoft's next CEO from making big changes if he remains chairman.

Update: Swisher follows up by reporting Microsoft's board is set to meet this weekend, and that its CEO announcement will come next week.

Update 2: The WSJ reports Nadella has entered into CEO contract talks with Microsoft's board. The paper suggests Gates' possible resignation as chairman stems from Nadella's wish to have Gates assist him by spending "more time on technology and strategy."

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Comments (19)
  • outofhere
    , contributor
    Comments (3694) | Send Message
    LOOKS like the peter principal has won again.


    For those unfamiliar with the peter principal. you get promoted above your competency.


    Example the mechanic who can take apart any engine in the world a solid worker. They promote him to service manager and he has no clue how to work with paper.
    31 Jan 2014, 01:10 PM Reply Like
  • anil92691
    , contributor
    Comments (827) | Send Message
    This guy heads a successful division!
    31 Jan 2014, 01:19 PM Reply Like
  • techy46
    , contributor
    Comments (11972) | Send Message
    @NYC You really need to brush up on Satya who's running a $19 billion Microsoft division and has credentials that make both Gates and Jobs look like shade tree hackers.
    31 Jan 2014, 03:34 PM Reply Like
  • wil3714
    , contributor
    Comments (2367) | Send Message
    Yea I dont get him either.
    31 Jan 2014, 07:48 PM Reply Like
  • outofhere
    , contributor
    Comments (3694) | Send Message
    How about you find out what the top ten talents a CEO needs to know
    and then see how many he has. Understanding technology is one how many others does he have. check out what he did a sun micro too.Contact wil 3714 below as he is an mba student he might be able to assist you on the talents.


    I still long and rolling calls and will give him a shot however history tells us most techies crash when they get to the top slot.
    31 Jan 2014, 09:02 PM Reply Like
  • outofhere
    , contributor
    Comments (3694) | Send Message


    I have not heard from you since I described the software I use.
    31 Jan 2014, 09:06 PM Reply Like
  • wil3714
    , contributor
    Comments (2367) | Send Message
    Trying to understand what your talking about is pointless and a waste of time. I dont know what your referring too.
    2 Feb 2014, 12:50 AM Reply Like
  • outofhere
    , contributor
    Comments (3694) | Send Message
    WIL 3714
    UNDER THE : HP And Google Win As Microsoft Drops XP COMMENTS ON 12/26/13 YOU SAID
    Doing research for 300 stocks is ridiculous let alone owning 300. You'd be a fool since even remembering 300 tickers would be a task
    I have special software which from a visual field looks like a combination yahoo finance detailed portfolio and excel spread sheets
    the first paragraph gives you the standard summary
    bid ask 52 week h &l and so forth
    the second paragraph is a series of charts
    1st is 1 year
    2nd is since the security was bought on a qtr. basis
    3rd is weekly
    the third paragraph
    tells me what broker its at and the position is
    broken out by each buy or sale
    the fourth paragraph
    matches long stock to short calls
    and other options in play
    the fifth paragraph
    is a maturity list of all options
    the greatness of the software is it has only a three minute delay from real time.
    it sounds much more complicated than it is.
    You do the same thing daily you eyes with out thinking pick up
    the changes.
    26 Dec 2013, 07:47 PM


    You must be a poor student when you forget so easily
    2 Feb 2014, 12:23 PM Reply Like
  • wil3714
    , contributor
    Comments (2367) | Send Message
    LOL I cant believe you went and pasted that in


    Thats not research thats just technical analysis & bid-ask spread. Thats not research and if you at retirement age and trading options thats funny. I do fundamental analysis which is completely different.
    3 Feb 2014, 12:20 PM Reply Like
  • outofhere
    , contributor
    Comments (3694) | Send Message
    That's the system I use to follow my assets. That's the one you said could not be done. I agree that's not research its maintenance of the positions. Please tell me why trading options and being retired is funny. I've traded options long before the CBOE came about. Read about the Put & Call dealers in NYC the history goes back over 150 years. I agree fundamental analysis is completely different and can be useful however a report is written and then distributed to clients. I receive reports constantly along with email alerts from the nine research and brokerage houses of up and downgrades. Even yesterday as an example I received 9 emails alone from TD Ameritrade.
    Once you retire you need a couple of hobbies, for me trading and helping others are just two.
    3 Feb 2014, 01:26 PM Reply Like
  • anil92691
    , contributor
    Comments (827) | Send Message
    "At the same time, some worry Nadella won't make the kind of sweeping changes (major cost cuts, the shedding of unprofitable units) that were expected of Mulally, and have reportedly been considered by Stephen Elop."


    Any investor that is very concerned about MSFT and its ways is a bad investor, if he/she has not sold its position in MSFT and moved to a company they think is well run.


    If you look at MSFT's finance in the last 5 years, revenues, profits and dividends are growing well. Only a fool will make drastic changes to change that. Microsoft needs a leader who will stay the course and find ways to speed up the engine, add sails and cut through the ice in the direction it has been going in the last three years.


    What the new CEO should do is get rid of some high paying managers of slow moving divisions and replace with insiders who deserve a promotion. And Elop must go. I would hate to think that the workers in the Nokia Lumia division have any respect for the man who brought down Nokia. If this was a ship of the 1700s, the workers would have thrown him off the boat in the high seas to never hear of him again.
    31 Jan 2014, 01:26 PM Reply Like
  • northern_bald_eagle
    , contributor
    Comments (61) | Send Message


    Actually Elop saved Nokia from becoming like Blackberry is now. As a Nokia shareholder I'm grateful to him for the profits I have made because of what he did as CEO of a sinking ship long before he got on board and rescued it.
    The selling of the Lumia division and the latest results and perspectives from Apple etc... just confirm that smartphones are commodities right now and Nokia got out in time with a very good deal with Microsoft.
    By the way I'm a very satisfied Lumia user too. Very nice and quality phones, Commodities regardless...
    31 Jan 2014, 02:07 PM Reply Like
  • Ruffdog
    , contributor
    Comments (3674) | Send Message
    NBE I am with you, well said!
    long MSFT, NOK
    31 Jan 2014, 02:58 PM Reply Like
  • techy46
    , contributor
    Comments (11972) | Send Message
    Satya Nadella is the right person to lead the world's largest enterprise software provider.
    31 Jan 2014, 03:35 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1824) | Send Message
    One wonders how the product of a university in India famed for only one thing - viz. taking students in return for "capitation fees" completely irrespective of any merit - how a product of Manipal rose so far and so fast.


    Satya must be a champion schmoozer and corporate politician. Not a great sign for Microsoft.
    31 Jan 2014, 05:49 PM Reply Like
  • Mking30
    , contributor
    Comments (142) | Send Message
    good news..
    31 Jan 2014, 07:52 PM Reply Like
  • davidibanez
    , contributor
    Comments (153) | Send Message
    Excellent choice. Hood as CFO makes it even better. Gates staying on the Board and working close with Nadella (at his request) is better still. Now, if MSFT can tap into Mr. Elop's marketing genius and make a powerful place for him, too, then it's all there and in place.
    1 Feb 2014, 02:32 AM Reply Like
  • Island_Dweller
    , contributor
    Comments (677) | Send Message
    Gladly holding onto my shares after this announcement.
    1 Feb 2014, 06:27 AM Reply Like
  • newnnly
    , contributor
    Comments (391) | Send Message
    I have been very excited watching MSFT transforming and accepting the new roles it will need to embrace. Nadella seems a good fit for the strategy investors have been crying for. I wouldn't be surprised if his name was on the top list for awhile now.
    1 Feb 2014, 03:41 PM Reply Like
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