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Photo: Associated Press
MSFT Down Marginally In Up Market
Major European indices were all higher this morning, and U.S. markets are trading higher as well. Shares of Microsoft are down marginally. Upcoming catalysts include holiday quarter earnings results announced after the close on Thursday, January 27 (and given that date was announced before the end of the quarter, I think it’s safe to say they beat numbers); entrance and uptake in the tablet market; Windows Phone 7 adoption; strides against current market leaders in cloud computing; and continued momentum of Kinect. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.Xbox 360 Kinect Outsold PS3 Two To One (IndustryGamers)
Wedbush Securities analyst Michael Pachter’s magic crystal ball predicts another month of Xbox 360 dominance in the NPD charts. His latest report says to expect sales of Microsoft’s console to be more than double that of Sony’s PS3 for the month of December or a 91% boost in sales over November. As for the PS3, Pachter figures it sold 1.2 million units in December, a 12% dip compared to its performance in November. NPD will release results on Thursday.
Standpoint Research Downgrades Microsoft From Buy To Hold (StreetInsider)
Since upgrading the stock in September, shares have bounced 19% in the approximately four months since that recommendation from Standpoint. The shares have hit the firms price-target and beat the S&P by more than 500 basis-points. Considering the recent run, the analyst is removing the firms highest recommendation and downgrading to the stock to a Hold rating.
Another Reason To Short Microsoft: Local.com (The Motley Fool)
Shares of Local.com plunged 25% last Friday as the company revised their recent quarter guidance down and blamed the Yahoo! / Bing integration. The news had better start making Microsoft investors nervous for two reasons says The Motley Fool contributor Rick Aristotle Munarriz. First, if advertisers continue to pay less, this will obviously translate into bad news for Bing because the Yahoo! deal included pricing guarantees Second, if other websites were counting on the syndication of Yahoo! paid search ads for monetization, chances are they’ll also start looking elsewhere.
Microsoft Needed Someone Better Suited Than Muglia For Tough Times Ahead
(The Financial Times)
Bob Muglia, the head of Microsoft’s server and tools division, is leaving (has been fired). Muglia’s division has progressed steadily, though a gaffe last year antagonized developers. He suggested that Silverlight was no longer as important to Microsoft’s strategy as it had been. That is not the sort of thing people want to hear from the person in charge of the company’s all-important developers tools business. Steve Ballmer said Microsoft simply needs someone better suited to the challenges ahead. Business Insider takes a look at why he was tossed and how Muglia feels about it.