Is Microsoft Getting Desperate?

| About: Microsoft Corporation (MSFT)
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Josh Arnold says Microsoft (NASDAQ:MSFT) is priced for "PC Armageddon" and thinks that's a good thing. He figures it's dirt cheap.

But there is every indication that PC Armageddon is, in fact, what is happening. Microsoft spent the Christmas season doing its best Karl Rove impression. It had all the money, it had all the commercials, but it had none of the love. Early indications are that the quarter was a disaster, with Windows 8 being compared not to Windows 7, which it replaced, but Windows Vista, the disaster that came before it.

The shares are trying to build a base right now at $26.50, giving it a market-average P/E of 14.33 based on results through September. The Christmas quarter is due for announcement on Jan. 24 and analysts are expecting 76 cents per share, with full-year estimates hovering at $2.91. (The fiscal year ends in June.) If the company did hit that number, it would score an earnings multiple of under 10, or the price of the stock would move up.

Here at Seeking Alpha most analysts are preaching patience. Ashraf Eassa says I shouldn't worry about Google Chromebooks. OK, I'm not worried about Google Chromebooks. OK, I won't worry about the product that is topping Amazon's sales charts. But should I worry that Nokia (NYSE:NOK) CEO Stephen Elop, a former Microsoft executive, is now talking publicly for the first time about dumping Windows Phone for Android, as Jacob Steinberg reports?

When, exactly, do we start worrying?

CEO Steve Ballmer made a guest appearance at the Qualcomm (NASDAQ:QCOM) CES keynote, a show Microsoft used to dominate but chose to abandon starting this year. Ballmer was in full salesman mode, demonstrating his phones and uttering the catch phrase "born mobile," but all it did was point out, once again, just how bad Microsoft is lagging in this market.

Microsoft may have sales, but it also has a stink on it, an undeniable technology reek I saw at Sony (NYSE:SNE) in the last decade and at Apple (NASDAQ:AAPL) in the 1990s. Yes, Apple recovered, but I see no indication that Bill Gates is waiting to take his company back or that he has great new product ideas in his back pocket. He prefers saving the world.

Every great tech company is a dictatorship. Every great tech company is entrepreneurial. Ballmer is a salesman, not an entrepreneur. He's had a decade at the top and things aren't getting better. There doesn't seem to be anything, or anyone, behind him, save a lot of yes-men. If Windows 8 is a failure and Windows Phone is a failure, are we supposed to wait on Xbox 720 for earnings acceleration?

Frankly, I'm losing patience with Microsoft. I'm getting ready to take some heavy losses and wash my hands of these people. How do you feel about it?

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.