While these shareholders have voiced their concerns, there is no indication that Microsoft’s board would pay them any attention. These investors collectively hold more than a 5% stake in the company, according to Reuters, and the company has requested that these investors remain anonymous because their discussions were private.
As of now, Bill Gates is the largest individual shareholder of Microsoft. He holds on to 4.5% of the $277 billion company. These investors are concerned that Gates holds exponentially more power than his current stake in the company would generally allow for.
The complaint these investors had against Gates was that his role as chairman “effectively blocks the adoption of new strategies and would limit the power of a new chief executive to make substantial changes.”
Another problem investors are having with Gates is his involvement in the Bill and Melinda Gates Foundation. These investors feel that Gates is given too much power in Microsoft when he spends the majority of his time and personal funds working on and with the Foundation.
The CEO Steve Ballmer announced in August that he would be retiring within the next few months as soon as the company is able to find a replacement. Ballmer’s strategy will continue on after his departure. Things the CEO has been working on, such as his focus on making new devices such as the Surface tablet and Xbox gaming console, are expected to continue on with the placement of a new leader.
There have been several rumors as to who will take the reins next with the two frontrunners being Nokia CEO Stephen Elop and Ford Motor CEO Alan Mulally. Sources
Microsoft is still considered one of the best and most valuable technology companies. Last year it made a net profit of $22 billion, but its primary Windows computing operating system comes up against increasingly more pressure as people move towards smartphones and tablets and away from the personal computer.
Microsoft’s historical price, revenue and net income:
Microsoft has a market cap of $282.55 billion. Its shares are currently trading at around $33.92 with a P/E ratio of 13.10, a P/S ratio of 3.60 and a P/B ratio of 3.50. Microsoft had an annual average earnings growth of 14.4% over the past ten years.
GuruFocus rated Microsoft the business predictability rank of 3.5-star.
Check out Bill Gates second quarter portfolio here.
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