Microsoft Candy is Dandy but Sex Wouldn’t Rot You Teeth $MSFT $GOOG $AAPL $YHOO

Microsoft (Nasdaq: MSFT) announces dividend increases and share buy backs. As previously predicted the Financial Skeptic called for dividend increases and share buy backs just to keep investor enthusiasm err engagement err addiction up there.

The move is essentially a “Candy is Dandy but Sex Wouldn’t Rot your Teeth” gambit. By increasing the dividend you more deeply engage income investors and protect the floor. By purchasing shares you enhance the financial engineering. but this is all Dandy Candy.

The real sex will come when the new sovereign is found and proclaimed. There will be a magnificent royal procession allowing the subjects to see the new king and proclaim allegiance. Hopefully the sex will not rot our teeth.

It’s all about Steve Ballmer’s replacement. Until we know and have confidence there is a Black Swan Co-relation which causes the market to shiver unexpectedly.

George Gutowski writes from a caveat emptor perspective. He does not like shivering unexpectedly. Follow him on Twitter @financialskepti

Microsoft/Nokia Will Screw Over Apple and Android $MSFT $GOOG $AAPL $NOK

Microsoft (Nasdaq:MSFT) in a controversial move has acquired Nokia (NYSE:NOK). Not sure if this is to secure a tenuous toehold in mobile devices using Windows or is it a way to source a new CEO. For $7.2 billion it better be to work the Windows toe hold, because you can get lots of excellent CEO’s for less than $7.2 Billion.

The acquisition comes lockstep with Ballmer’s retirement announcement so there must be a plan. Microsoft is solving Nokia’s capital shortage problem. Microsoft is relying on Nokia old Mojo coming back. Maybe they got it and maybe they don’t. Stand by for product announcements and see what they roll out.

Microsoft and Nokia were first movers and disrupters. They clawed out a strong market share and went to sleep comfortable in the status as world-class dominator. They weren’t watching and competitors started to eat their lunch. Nokia missed a few turns on the road and found themselves in the ditch.

The major flaw that everyone keeps shrieking about will be the lack of apps for a Windows-based product. Some claim developers are too beleaguered trying to cope with Apple and Android applications. This is wrong. Developers will go where the money is. Microsoft has $61 Billion in cash and growing.

Here is how Microsoft will need to throw their money around to develop the right set of trends.

  1. Bonus developers for creating Windows Driven Apps. Most will develop apps if the Windows Smartphone develops more traction.
  2. Develop apps exclusive to Windows which will drive sales of Windows Smartphones and cause some abandonment of Apple and Android. Microsoft is still strong in enterprise applications. There’s lots of stuff that is App ready which should be exploited quickly.
  3. Enterprise apps will drive multiple unit sales. Not the ones and twos at retail kiosks. Microsoft is not dry of app ideas just unexploited.

The exclusivity will the way Microsoft/Nokia screw with Apple and Android.  Watch for lawsuits. but in the ensuing years market positions will be established.

George Gutowski writes from a caveat emptor perspective.

 

 

Microsoft Bizarre Behaviour like a fish out of water. What to watch for! How to profit! $MSFT$GOOG $AAPL $YHOO

Steve Ballmer CEO of Microsoft is leaving (Nasdaq:MSFT). OK so now what? How to make a buck and not get skinned alive. Here’s a few things to keep in mind.

  1. This is going to take a year. That’s a long time even in dare I say it a “blue chip high-tech company”. Lots of noise with only a few anointed ones knowing the truth will be the norm.
  2. Everyone wants the culture changed. This means someone from the outside will be brought in and handed a big crowbar. He will then go ahead to cut, chop, slice, dice, splice and even fire people as he or she sets sail for shores unknown.
  3. Microsoft is a huge company. The MoJo that say an Apple or Google have going is hard to replicate at Microsoft. Microsoft is tied to the PC and it is now a mobile marketplace. A new guy will take forever to turn it around.
  4. Prepare for the worst and assume the new guy will fail. There are no guarantees. A failed successor will be worse than Steve Ballmer.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Microsoft Investors will be bribed, pampered, coddled and other neat stuff. Read how! $MSFT $GOOG $AAPL $YHOO

Steve Ballmer (Nasdaq:MSFT) is leaving in the next twelve months. Here are a few things Microsoft will do to keep investors loyal, happy warm and fuzzy.

 

  1. Serious dividend increases. Money talks and Microsoft has some. Lots actually. To keep investors focused the board will increase the payouts. A strong dividend will keep a floor under the stock price. Many of Microsoft’s businesses are steady predictable earners.
  2. To unlock value some businesses may be spun out and or sold off. Anyone new to Microsoft will want to write on a clean slate so let’s get going with the divestitures.
  3. No new major products and/or  initiatives will be undertaken before the new boy wonder arrives and starts putting his fingerprints on projects and idea’s. So in the meantime capex will shrink and cash flow will grow. Not a good thing but a real thing.

 

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Einhorn vs Ballmer The Art of Corporate Bitch Slap

David Einhorn President of Greenlight Capital is growing desperate. He is touted to be a long-term holder of Microsoft (Nasdaq:MSFT) . Many a simplistic analyst overlays Steve Ballmer‘s ten-year tenure as CEO with a ten-year stock chart showing no capital growth. David Einhorn as he dabbles with buying into the New York Met’s is trying to talk up Microsoft stock from the outside.

Greenlight is a long-short hedge fund that seems to have had a very good run. The problem is to continue serving up excellent results. So trying to displace Steve Ballmer seems like the best course of action to David Einhorn. Continuing to hold the stock and publicly criticizing the leadership is schizophrenic.

It is very easy to find fault and fire someone. But who does David Einhorn suggest replace Steve Ballmer? A public execution at David Einhorn’s behest would traumatized Microsoft and create more harm then good. CEO’s set courses of action which cannot be changed over night. That’s probably why the New York Mets look attractive. The roster is very small. Just hire a few good players and away you go. Simple isn’t it. Just look at the fantasy leagues and how well sports fans are doing.

David may soon find out that running an operating company such as Microsoft is much more complicated than the fantasy of a professional sports franchise.

Disclosure: “George Gutowski” writes from a “Caveat Emptor Perspective” I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.

Will AT&T Challenge Microsoft Skype Marriage $T $MSFT #skype

Official insignia of the European Court of Justice

Image via Wikipedia

Microsoft (Nasdaq:MSFT) has become a major surprise player in the telephony market. Microsoft by passes a lot of legacy issues that traditional Bell companies are still struggling with. Has Microsoft become a global monopoly that troubles AT&T (NYSE:T) and perhaps even Carlos Slim.

What is to stop AT&T from demanding anti-trust action. Remember the European Union does not have soft fuzzy feelings for Microsoft so what is to stop them from soul sapping investigations.

Just a thought but when you make such a large move other large players see their vested interests being threatened and will move to protect themselves. investors need to get past the noise and see how the other players see it.

Disclosure: “George Gutowski” writes from a “Caveat Emptor Perspective” I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.

Microsoft Eats Skype To Become The New Ma Bell Dividend? $MSFT #skype #dividend

Image representing Microsoft as depicted in Cr...

Image via CrunchBase

Microsoft (Nasdaq:MSFT) will buy Skype for some $8.5 billion. Internet telephony potential remains huge but Skype has not been able to show a profit. Given the low yield on cash reserves the small losses that Skype generates should not be material in the short run.

The deal is an inflection point for Microsoft’s image.  They are buying infrastructure and risk becoming  a Ma Bell stock. Grind out the traffic and create growing yields for investors. This is not exactly what Microsoft is saying but what else can happen. Watch for Microsoft with its enterprise solutions start to market internet telephony to large corporate and government clients. This is cash flow from the get go.

The question becomes one of intellectual honesty. Will Microsoft have the maturity to admit that it should be a dividend paying stock constantly increasing its dividend yield. Steve Ballmer does not yet speak this way and perhaps he is still wrestling with the concept. After the past ten years many traders call the stock dead money. The hot frothy day traders do not play here.

So when your market cap is some $220 billion the next obvious move is to become a dividend yield play and attract the buy and hold forever crowd.

Disclosure: “George Gutowski” writes from a “Caveat Emptor Perspective” . I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.