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November 9, 2005

Ballmer tells shareholders it’s products not share price

Posted by David Hunter at 8:37 PM ET.

Today was the annual Microsoft shareholder meeting and the usual details are in the press release, but the big attention getter in most reports was Ballmer: Products Define Microsoft Success:

Microsoft Corp. Chief Executive Steve Ballmer told shareholders Wednesday that the software behemoth measures its success by its products, not its share price.

“We have never really used the stock market itself as a barometer of our success,” Ballmer said at the Redmond company’s annual shareholder meeting in Bellevue, a Seattle suburb.

Microsoft shares have been trading at about the same level for several years.

In the past 52 weeks, shares have traded between $23.82 and $30.20. Shares were up 4 cents at $27.09 in midday trading Wednesday on the Nasdaq Stock Market.

That generally isn’t what shareholders want to hear, but then Microsoft isn’t the usual company. As far as the products go:

Analysts say the concern is that the increasing number of Internet-based offerings, especially those that are free and ad-supported, will make people less likely to buy new versions of Windows and Office, Microsoft’s cash cows.

I suppose it’s never too early to worry about cannibalizing your own market, but the other side is that if Microsoft doesn’t do it, someone else may.

Update: Todd Bishop has some firsthand shareholder reaction.

Filed under Executives, Financial, General Business, Investor Relations, Steve Ballmer

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3 Responses to “Ballmer tells shareholders it’s products not share price”

  1. Microsoft News Tracker » Whither Microsoft’s stock price? Says:

    [...] Steve Ballmer may have famously told Microsoft shareholders last year that “the software behemoth measures its success by its products, not its share price,” but some are motivated by more mundane concerns. Daisuke Wakabayashi surveys the situation for Reuters in “Lacking identity, Microsoft stock crawls along:” On the surface, Microsoft Corp. seems like an investor’s dream: It repurchased $7.7 billion of its own shares in the past quarter, issued the largest one-time dividend in corporate history, and generates stacks of cash. [...]

  2. Steve Ballmer does Wall Street -- Microsoft News Tracker Says:

    [...] Bloomberg News: Microsoft Corp.’s Steve Ballmer is heading to Wall Street to meet with analysts and investors in an effort to blunt criticism that he’s ignoring shareholders. This may be a cross cultural experience for all involved, since Mr. Ballmer famously told shareholders that Microsoft “measures its success by its products, not its share price.” The chief executive officer of the world’s biggest software maker will spend two days this week giving speeches and hosting small gatherings in an effort to persuade shareholders that his new spending plan will help bolster the stock price. [...]

  3. Niall Kennedy leaves Microsoft after four months -- Microsoft News Tracker Says:

    [...] The stock plummeted on the announcement Microsoft did not have its costs under control. Microsoft’s market cap lost close to $59 billion in the six weeks after I joined and second quarter financials were released, more than the GDP of Ecuador and over half the market cap of Google. What do you do when the market responds to your 6 month-old online services strategy by reducing your valuation by 1.5 Yahoos? Windows Live is under some heavy change, reorganization, pullback, and general paralysis and unfortunately my ability to perform, hire, and execute was completely frozen as well. There’s more by following the link, but the impression that Microsoft gives of stiff arming the importuning Wall Streeters in order to invest in growth technologies doesn’t seem to be real clear to the troops. [...]

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