Hedge Funder Dumps Stake In Microsoft, Says The Company's 'Decade Of Mismanagement' Could Turn It Into A 'Shrinking Company'

Hedge fund god David Einhorn dumped his stake in Microsoft, making a bit of a profit.

The stock was up after another fund, ValueAct, started buying shares in Microsoft. ValueAct poured $2 billion into Microsoft. It’s lately been agitating for a seat on the board

Einhorn explained his decision to get out while he could with a pretty brutal burn of the company, comparing it to Alex Rodriguez, the troubled Yankees star:

Microsoft (long): In 2006 we compared Microsoft to A-Rod, which was a compliment at the time. In 2013, the comparison is still apt, but it is no longer a compliment. Windows 8 appears to be a flop, and a decade of mismanagement has put Microsoft at risk of becoming a shrinking company. We were pleased when an activist gave the stock a boost, giving us the opportunity to exit with an annualized high single-digit return that slightly outpaced the market during our lengthy holding period.

Einhorn and Microsoft have had a long, contentious relationship. In 2011, he called for Microsoft to fire CEO Steve Ballmer. Obviously, that didn’t happen.

He’s also an investor in Apple. Here’s his take on Apple: 

Apple (AAPL) completed its assessment of its capital management policy and decided to return $100 billion to shareholders over three years in dividends and share repurchases. At quarter end, AAPL’s market capitalisation was $372 billion, implying a 9% annual return of capital to shareholders. Sentiment towards the stock is incredibly bearish. Early in the quarter, the concern was that AAPL was losing market share to Samsung. When Samsung’s latest Galaxy phone failed to impress, rather than re-assess AAPL’s better competitive position, the consensus story shifted to concerns about market saturation of high end phones. Sometimes, you just can’t win. AAPL was our largest loser in the quarter falling from $442.66 to $396.53 per share. Unless operating results are about to head off a cliff, we expect the shares to stage a recovery.

Greenlight Capital Q2 2013 shareholder letter

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