The week had been a pretty tough one for Microsoft head honcho Steve Ballmer. The week started off with David Einhorn demanding
the CEO’s dismissal. David is a big shot hedge fund manager and holds about 9 million Microsoft shares. Though, this number roughly translates to mere 0.11 percent stake in the company, but the hedge fund manager, who is famous for his tryst with Lehman Brothers stock, wields enough power that his public outburst against Ballmer made Microsoft board to respond to it. Luckily for Ballmer, the 9-member board backed him and reiterated its faith in his capabilities.
David Einhorn accused Ballmer of being "stuck in the past." And he did not stop here and further went on to indict Ballmer for practicing "Charlie Brown Management" style. Though, Einhorn is none too happy with Ballmer, but he still has faith in Microsoft brand and said that he believes the stock to be undervalued. He said, "He [Ballmer] has allowed competitors to beat Microsoft in huge areas, including search … Even worse, his response to these failures has been to pour tremendous resources into efforts to develop his way out of these holes.”
But Ballmer need not worry, not at this moment at least. He still has Bill Gates' blessings, who is the largest stakeholder with 6.6 percent Microsoft share in his coffers. Einhorn is not the only investor seeking Ballmer's ouster.
Time and again, other investors had raised doubts about Ballmer's management style, however, most of them were not as vocal as Mr. Einhorn. An executive from Ironfire Capital, a hedge fund which used to hold position in Microsoft stock, said, "I don’t see anybody else on the management team at Microsoft that I think would be much better than Ballmer.” This comment shows the sorry condition of the once great company. Microsoft is fast losing ground to Apple and Google. If things continue going this way, then very soon, even the board may have to change its tune. Watch out, Mr. Ballmer.