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Value Act buys $2bn stake in Microsoft

Updated Becomes a top 15 stakeholder
Mon Apr 22 2013, 17:35
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INVESTMENT FIRM Value Act reportedly has taken a $2bn stake in Microsoft.

Microsoft's stagnant share price has made the firm unattractive to many investors looking to make a quick buck off volatility. However the firm has reportedly caught the eye of investment firm Value Act, which according to CNBC has made a $2bn investment in Microsoft stock.

Value Act claims it is a firm that, "concentrates on acquiring significant ownership stakes in a limited number of companies that it believes are fundamentally undervalued", which in turn has helped Microsoft's share price rise by over four percent. Such is the limited movement of Microsoft's stock price that the upturn helped Microsoft shares hit a seven month high.

According to figures compiled using Thomson Reuters data, a $2bn stake in Microsoft would amount to less than one percent of the company. Nevertheless, Value Act's stake would put it in the top 15 investors in the firm, meaning that Microsoft won't be able to simply ignore any demands that Value Act might make.

Value Act said it likes to work "in a constructive manner" with a company's management. Microsoft CFO Peter Klein recently announced his departure from the firm at the end of June, so in the near term it looks like Value Act will have to be 'constructive' working with CEO Steve Ballmer.

Despite Microsoft receiving criticism for its Windows 8 operating system, the firm posted surprisingly healthy financials and continued to provide its investors with a dividend that supporters point to as one of the technology industry's longest sustained records of returns.

Update
A Microsoft spokesperson said, "Microsoft's Board of Directors and management team welcome the perspectives of shareholders. We are committed to enhancing value for all shareholders, and will continue to take actions that we believe will enable us to achieve this objective." µ

 

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