/// One Microsoft On, Ballmer Out, ValueAct In — Get Ready for the Next Shoe to Drop at Microsoft

September 1, 2013  |  All Things Digital

It would seem that all it takes to be in a position to make big changes at Microsoft is $2.2 billion. That’s the value of the tiny 0.8 percent stake that ValueAct had compiled, which was enough to get the software giant to agree last week to give the activist shareholder the option to take a seat on its board . Let’s be clear — although Microsoft tried a take-the-trash-out-on-Friday-before-Labor-Day move, which was also a deadline for ValueAct to notify Microsoft if it planned a proxy battle — the news was unprecedented in the history of the company. As voiced to me by many longtime observers and also investors, the notion that shareholders had become so disgruntled that the once-powerful company determined that it would lose a proxy fight pretty much says it all. Here’s how The Wall Street Journal’s Shira Ovide correctly put it : “Few companies of Microsoft’s size have welcomed activist investors on to their boards, for fear of disruption and conflict. And in recent decades it would be unheard of for an outside director, who simply agitated for change, to be placed on a board.” In fact, ValueAct — which is considered a management-friendly activist investor — manages only $12 billion in its fund, and so had to have a lot of investor support to put the true pressure on Microsoft. As it turned out, it did not have to, gaining the right to join the board and presumably more, with little fuss. The ValueAct news came soon after the announcement last week that longtime CEO Steve Ballmer would step down within 12 months. And — while Microsoft tried its best to deny any link between the two major events — they were clearly coupled. And mostly ill-timed, coming only weeks after Ballmer had outlined a major new strategy and reorganization for the company, called “ One Microsoft .” Now, according to numerous sources close to the situation, brace yourself for the next of many shoes to drop, in what appears to be a sequencing of events related to new management and perhaps a new configuration for the company itself

One Microsoft On, Ballmer Out, ValueAct In — Get Ready for the Next Shoe to Drop at Microsoft

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