I Agree with Marketwatch: Microsoft Stock is Dead Money

This article is so spot on people at Redmond need to tack it up in every cubicle.

The company has gone conservative to an extreme. It’s time for Chief Executive Steve Ballmer to replace upper and middle management and find some of those folks like the company had in the 1990s. 

Um, I would go with replace Steve Ballmer myself. How much value has he brought to the company anyway? The stock has stagnated in his entire tenure as CEO. I mean the only things he has produced that seem decent are Windows 7 and Xbox Live. Even after they did so well in consoles with Xbox360 they get to lose millions due to the Red Ring of Death problem. Plus Ballmers leadership brings these kind of screw-ups on:

The latest fiasco appears in the Faster Forward blog in the Washington Post and in the Mary Jo Foley posts linked within that about Microsoft. Apparently the company cannot produce any sort of competitive tablet until 2012. Read “Reports: Windows tablets in 2012, demo by June?” in the Washington Post.

 

This is bordering on the ridiculous, since every Tom, Dick and Harry has rolled out a tablet already — and by 2012 the market will be saturated with the things. Apple Inc.  is expected to roll out a third generation iPad by then. 

Yup, 2012 for the Windows Tablet. I will be willing to bet that it will be buggy and accidentally brick itself in a strong wind and other nonsense. It will have a few cool things like Xbox Live integration or the ability to link with your Zune or something equally worthless. Some people will buy it for a few months until they get fed up with the thing and just buy an IPad instead. Ultimately it will be a dismal failure and another example of how millions of dollars of shareholder wealth got set on fire by Ballmer and company.

The problem with Microsoft is that not only are they late to the party but they are late and crappy as well. The idea that a Windows 7 Smart Phone can accidentally brick itself on an update is so 90s and cannot be tolerated today.  They seem to be years behind Android and the IPhone so they can see the potential pit-falls in advance and they still screw things up.

In any case if you were a potential investor in Microsoft stock I would tell you to buy Treasury Bonds instead. At least with a 20 year bond you can get a 4.24% yield on your money. Microsoft only gives you a 2.4% dividend yield and when you eventually sell the stock you will probably get back the exact same amount you bought it at give or take a dollar or two.  I think the only way to unlock wealth in the company is if Ballmer steps down and they hire some top guy from Google or Apple. Any other scenario will leave the stock at $23-27 territory in perpetuity.