Microsoft Loses $34 Billion Market Value
The Share Sale, From The Highs Of Five Years, Is The Largest In Percentage Terms Since January 2009, When The Largest Software Company In The World Cut 5,000 Jobs During The Recession. At Some Point In The Day, The Losses Exceed 12%, Making It The Largest Decline Since The Internet Bubble Burst In 2000.
More Than $ 34 Billion Has Been Removed By The Market Value Of Microsoft Friday, Surpassing The Size Of Rival Yahoo.
Microsoft's Profits Were Wrecked By A Depreciation Of $ 900 Million In The Value Of Unsold Tablet Surface After It Cut Prices In Order To Excite Buyers.
The Poor Results Surprised Wall Street, He Thought The Strength Of The Business Customers Of The Company Would Help To Overcome A Decline In Sales Of Consumer Pcs. The Results Drew Fresh Skepticism CEO Steve Ballmer's New Plan To Reshape Society Around Devices And Services, Announced Last Week.
"The Recent Reorganization Does Not Solve The Problem Of The Tablet Or Smartphone," Said Nomura Analyst Rick Sherlund In A Note To Clients On Friday. "The Opportunity To Hardware Devices Just Got A Surface Radiation And Investors RT 900 Million Can Not Even Think To Wade Deeper Into The Territory."
Sherlund Suggested That Investors Will Put Pressure On Ballmer Activists To Reconsider Their Strategy, This Was A Reference To Valueact Capital, Which Owns A Share Of $ 2 Billion To Microsoft In April And Is In Negotiations To Secure A Seat On Board The Administration Of Microsoft.
"It (The Results) Was Much More Damaging Than Investors Expected, With Microsoft Missing Your Guide In All Divisions And The Lower Guide" Wrote Sherlund. "Just An Activist Investor Could Ask For."
Other Wall Street Analysts Were Also Dismayed By The Latest Financial Report To Microsoft.
Brokerages Raymond James And Cowen & Co. Lowered Its Opinion On Microsoft Shares A Notch To "Market Perform" And At Least Five Other Reduced Its Target Price To $ 3.
Indicative Prices Fell As Low As $ 35, Down From The Closing Price Thursday Of $ 35.44. The Shares Fell As Low As $ 31.02 On Friday And Closed At $ 31.40 On Nasdaq, Down 11.4%.
FBR Capital Markets David Hilal Said Revenue From Microsoft Windows Operating System In The Fourth Quarter Was 9% Below Their Expectations.
"The Key Drivers Of Growth Potential (Windows 8, Area) In The History Of Microsoft Seem To Be Disappearing, Head In FY14," Hilal Wrote In A Note.
Earlier This Week, Microsoft Said It Was Slashing Prices To Attract Buyers Area, Which Reduces The Value Of The Equipment In Your Inventory.
Microsoft Surface Tablets Launched Last Year To Challenge The Apple Ipad, But Sales Have Not Met Expectations.
"The New Operating System Windows RT Was Not Successful MSFT Had Planned," Said Cowen Analyst Gregg Moskowitz In A Note, Adding That The Expectations Of The Tablet Investors Were Never Very High.
Janney Capital Markets Analysts Said The Rebate Was An Admission That The First Attempt By Microsoft In The Tablet Market Had Failed.
The Company Also Said Thursday That It Expects That The Windows Software Revenue To Continue To Decline Due To A Weak PC Market.
Microsoft Outlook Points To A Weakening Of The PC Market Moves To Subscription Revenues And A Break Before Leaving A Xbox Game Console, Which Are All Expected Revenue Growth Pressure, According To Analysts Morgan Stanley In A Note.
Xbox Is The Only Device That Microsoft Has Found Favor Among Consumers And A New Version Is Expected To Launch This Year.
