The company may have constructed the biggest fishbowl in the financial world. Microsoft Inc. (NASDAQ: MSFT) has been through a not-entirely uneventful week, one which saw a class action lawsuit, a product announcement, and even a shakeup at the top; never a dull moment for the company known as "Mr. Softee"!
The lawsuit, brought about by investors who bought into MSFT over the spring and early summer, alleges Microsoft failed to tell them that its Surface RT tablet was not selling so well, and that inventories of the tablet were piling up.
In July, Microsoft did indicated that its fiscal fourth quarter was affected by a $900-million U.S. inventory charge related to Surface RT inventory adjustments, dropping the stock’s price appreciably in a short period of time.
Also this week, Delta Airlines announced it would be equipping its 11,000 pilots with the Microsoft Surface 2 tablet which will be used initially as an electronic flight bag to replace heavy paper-based flight kits containing navigational charts and aircraft operating and reference manuals. The move would save the carrier millions in fuel and help with the environment.
Lastly, in the aftermath of the retirement of Steve Ballmer from the helm of Microsoft, came word that some major investors would also like to see the back of Bill Gates. Three of the top 20 investors in Microsoft reportedly lobbied the board to press for Gates to step down as chairman of the software company he co-founded 38 years ago.
The three investors are concerned that Gates' presence on the board effectively blocks the adoption of new strategies and would limit the power of a new chief executive to make substantial changes. In particular, they point to Gates' role on the committee searching for Ballmer's successor.
They are also worried that Gates – the company’s largest individual shareholder, who spends most of his time on his philanthropic foundation – wields power out of proportion to his declining shareholding, now down to 4.5% of the $277-billion U.S. conglomerate.
In August, Ballmer announced his retirement, effective within 12 months, amid pressure from one of the company’s biggest investors.
On a day when much of investors’ attention was still being focused on the events on Capitol Hill, Microsoft shares were trading at $33.96 U.S. midday Friday, up 10 cents from Thursday's close, and in the upper portion of a 52-week range from $26.26 to $36.43 U.S.
