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MSFT Up With The Markets
Stocks are strong out of the gate on Tuesday after yesterday’s sell off despite a miss from Goldman Sachs. Housing starts surged and good news from IBM is carrying the market. Shares of MSFT are up as investors await earnings later this week. Upcoming catalysts include second calendar quarter results to be released on Thursday, July 21 at 5:30pm E.T.; the company’s Analyst Day at its new developer conference (BUILD) on September 14; Windows Phone 7 / Mango adoption with hardware partner Nokia; strides against current market leaders in cloud computing; entrance in the tablet market at some point; making money in the online business, including integration of Skype and improving the search / display business; and continued evolution of Kinect and next generation Xbox console. The stock currently trades at 8.5x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.
Shareholders Still Unhappy As Microsoft Stock Wanes (Seeking Alpha)
Shareholders of Microsoft continue to be frustrated with the company in a number of areas, especially capital allocation. Reasons for the stock under performance are essentially twofold:
- The market is sceptical of Microsoft’s ability to successfully transition to the emerging mobile and cloud computing environments.
- The company lacks a well-defined and articulated capital allocation strategy.
A well-designed capitalisation strategy (aka borrowing heavily to buy back stock) could generate immediate and ongoing attractive returns for shareholders and quickly drive the share price into the high-$30s (~50% upside).
When It Comes To Facebook, Microsoft Is Schooling The Competition (Seeking Alpha)
Microsoft has taken a much better approach to the Facebook phenomena versus Google, Apple and the rest. Back in October 2007 Microsoft invested $240 million in Facebook, which currently is equivalent to about a 1.3% stake in the company. Relatively insignificant, especially when compared to the new Facebook feature integration with Skype, which Microsoft purchased for $8 billion. It was a strategic move by Steve Ballmer to get closer to Facebook which could end up being brilliant.
Microsoft Attempting To Port Google Health Users (CNet)
All two of them. For the seeming handful of people who signed up to use the soon-to-be-shuttered Google Health online medical records service, Microsoft has an answer: join its service. Microsoft is attempting to make it easier for Google Health users and developers to move their data and applications over to Microsoft’s HealthVault alternative.
Microsoft Looking For Engineer For Top Secret Gov / Security Project (SlashGear)
Sometimes job listing that big companies post can give hints of what the company is working on. Microsoft is currently looking for an engineer for a “top secret” project that the Windows Phone 7 team. The job listing notes that the project is a volume 1 feature set with planning to be completed in the next month. The mission of the project is to “GO BIG! DISRUPT THE MARKET!” and the listing appears to be government and security related. Does that sound like something that will disrupt the market? Wonder what it is?