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Related Topics: Venture Capital, Microsoft Developer


Fancy That. Somebody Believes in Microsoft

Hedge fund believes investments in the web and cloud could make MSFT the largest cloud company in the world in 3 to 5 years

Sometimes activist hedge fund ValueAct Capital Management LLP has up and plopped something like $1.9 billion into Microsoft’s stock with the expectation that it will amass more on the theory that the company is fundamentally undervalued.

It told the Wall Street Journal that it believes Microsoft will win out in the long term and that the company’s investments in the web and the cloud could make it the largest cloud company in the world in three-five years.

It’s a lot of money but represents less than a 1% position in the company although it does make ValueAct one of the top 15 investors in Microsoft and Microsoft ValueAct’s biggest holding.

It’s thought to be in for about 60 million shares.

Microsoft’s stock, once the making of many a millionaire, has been horribly range bound for at least 10 years. Windows 8 and Microsoft’s little adventure into tablets ain’t doing anything for it now and may in fact be dragging the whole PC market down.

According to CNBC, which broke the story, ValueAct only intends to try to light a fire under Microsoft, engage with its board or, perhaps, think about challenging CEO Steve Ballmer if it grows unhappy.

One percent isn’t that influential and Ballmer intends to stick around for another four or five years but ValueAct might galvanize other shareholders.

There’s speculation of a serious buyback but that would probably require a tax holiday on repatriation.

ValueAct’s disclosure Monday tickled Microsoft’s shares 3.6% to $30.83, a seven-month high.

The hedge fund manages about $8 billion.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at) or paperboy(at), and by phone at 516 759-7025. Twitter: @MaureenOGara

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