Microsoft's Stock Is Getting Crushed This Morning As Reality Sets In

Microsoft is down 4.5% this morning on the news that its buying Nokia.

This Nokia deal is a dose of reality for any investor that got optimistic when Steve Ballmer announced he was leaving the company.

Instead of creating a simpler company that focuses on the enterprise like everyone wants, Microsoft seems poised to become an even bigger, more complicated company with more money-losing consumer businesses.

Xbox barely makes any money. Windows Phone is a money loser. Bing is a money loser. Consumer PCs are in decline (though they make lots of money).

Meanwhile, Office and Servers & Tools are growing, profitable businesses.

The Nokia deal isn’t terrible. Microsoft is spending ~$7 billion to acquire its smartphone partner. Odds are that Nokia was going out of business if Microsoft hadn’t stepped in. And that $US7 billion was just going to be sitting around, since Microsoft wasn’t bringing off shore cash back home for tax reasons.

Still, this deal is a reminder that just because Ballmer is leaving, it doesn’t mean anything is necessarily going to change at Microsoft.

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