Microsoft (Nasdaq:MFST) continues it’s all too public for a worthy successor or sacrificial fall guy as the next CEO. Ballmer final bailed. Bill Gates may have become one of the richest men in the world but he did not build a team of reliable successors.
The public beauty contest nature of the search has created more doubt than certainty about Microsoft’s future. Personally I believe they almost picked Alan Mulally but passed because he was not a technology guy. well you knew that up front so why did you kick the tires. Answer: They don’t know what they are looking for. Alan Mulally comes with too much credibility and would probably need to oust Bill Gates and decide a new future. Bill Gates cannot give up his legacy and killed it. Watch for a few disgruntled directors on that one.
The market wants a new CEO who will lead into a shiny new future. Well if Bill Gates and Steve Ballmer could not figure it out; the new guy will need a growing in period as he/she assesses the future and picks lottery numbers.
So when the winner is announced to all the market hoopla there will be immediate disappointment. Because after the first week in the office there will not be a flurry of strategic product announcements.
The stock will drift down as expectations shrivel and Microsoft falls off the radar.
Then the deep value investors smell the money and move in.
In the meantime the market is too stoked to allow anything or anybody to make it happy.
BTW if the new guy does not work out and gets his reins pulled in watch for potential mergers and acquisitions to paper over the problem.
BTW when the new guy shows up watch for a series of mergers and acquisitions to try to create a strategic lift-off.
In any event the company investors understand today will be radically different in a short period of time. in the meantime watch for some buy backs and dividend increases to keep investors paid while waiting.
George Gutowski writes from a caveat emptor perspective.