The Microsoft Investor is a daily report from SAI. Sign up here to receive it by email.
MSFT Off With The Rest Of Tech
The market is sideways this morning as investors weigh the positive drop in jobless claims with other macro factors. Shares of MSFT are off, and the rest of tech is trading sideways. Upcoming catalysts include any entrance into the tablet market (even just as an operating system); Windows Phone 7 adoption; strides against current market leaders in cloud computing; holiday sales of Kinect; and continued upgrade cycles of Office 2010 and Windows 7. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.
Microsoft Closes USDA Cloud Deal (Bloomberg)
Microsoft won a contract to provide Web-based e-mail and other services to the U.S. Department of Agriculture, making headway in efforts to gain share in the growing market for cloud computing. The federal agency will move 120,000 users to the company’s Internet-based e-mail and conferencing software. Nice win for Mr. Softie. Although Google is crying that it wasn’t a win, they never got to bid.
Too Soon To Give Out Windows Phone 7 Numbers… (All Things Digital)
Windows Phone 7 has been on the market for a month now, but Microsoft has steadfastly refused to give out any concrete sales numbers. Microsoft Vice President Joe Belfiore told Walt Mossberg that, while pleased with the progress, it was just too soon to give the numbers. This wasn’t a problem at all for Kinect which they announced sold 2.5 million units by the Thanksgiving weekend.
… But We’re Hiring (Forbes)
Microsoft is currently hunting for about 40 people to add to its Windows Phone 7 team. The jobs listings, which started appearing in late November on Microsoft’s careers website, range from software and hardware engineers to user experience designers and even public relations managers. Microsoft’s recruitment push points to the company’s determination to succeed in the mobile industry.
Positive Sentiment Building For Microsoft And Investors Roll Up Calls (The Street)
Microsoft saw some gigantic call positions rolled higher Wednesday as traders expressed optimism for a rally in the coming months. Volumes were off the charts with institutional-sized selling of December 26 calls to buy the higher February 28 calls in what’s known as “rolling positions.” The activity overall was huge across the board, with volume of about 270,000 contracts versus the 72,000 daily average. Call-buying accounted for more than half of that total.
Microsoft Bonds Tumble as Treasury Yields Rise (Bloomberg)
Bonds issued in September by Microsoft tumbled in secondary trading. Microsoft’s $1 billion of 4.5% bonds maturing in October 2040 tumbled 1.8 cents to 92.085 cents (58 basis-points). “When you look at a 10-year bond and a 30-year bond, the lowest coupon ones are also going to be the most interest-rate sensitive compared to other same-maturity bonds,” said Anthony Valeri, a market strategist with LPL Financial Corp. “The lower coupon just means less income, and that’s less of a buffer against price declines associated with higher rates.”
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.