“Activist hedge fund ValueAct Capital took a $2 billion stake in Microsoft, its CEO Jeffery Ubben announced at an investment a conference in New York, today.
He explained the investment by saying, “In three to five years, which is our time horizon, we’ll stop talking about PC cycles and instead talk about Microsoft as the largest cloud-computing company in the world.”
For his sake, let’s hope so. The PC business is imploding, so Microsoft’s traditionally lucrative Windows business is flattening, and could start shrinking soon.
Microsoft has two other businesses that are doing well — Servers and Tools and the Business Division, which is home to Office. Those businesses are strong enough to offset Windows, for now.
Microsoft’s stock has been flat for the longest time. A lot of investors have been tempted by it, believing there is value to be unlocked. So far, they’ve been wrong.
Microsoft is up 12% year to date, and rose 4% on today’s news. It closed at $30.83….”
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