On Aug 23rd, MSFT’s surprise announcement that CEO Steve Ballmer would be stepping down within 12 months sent the shares up almost 10% nearly completely filling in the earnings gap from July. Flash forward to today’s announcement of the Windows maker paying more than $7 billion for NOK’s handset business and patents, and now all of the sudden you have the stock flirting with the summer lows.
As I described earlier in the MorningWord (Why Buy the Cow When You Already Get The Milk For Free? here) there are many fundamental questions regarding the purchase, but luckily the company is hosting their annual Financial Analyst Meeting on Sept 19th, where I am sure there will be plenty to talk about. While today’s news appears to be a fairly large acquisition at a time where the company is facing massive challenges, first finding the right person to right the ship and second, integrating the trans-formative acquisition and executing on the plan set forth by Mr. Ballmer. Frankly I am shocked that the board agreed to undertake such a decisive action prior to the naming of the new CEO, but maybe just maybe the board thinks that through the acquisition they have found their new CEO, Mr, Elop, former MSFT executive and head of NOK.
While regular readers of the site know, I am no fan of MSFT’s products, management, or ever changing strategy, but as a trader, the lower the stock goes in front of the Sept 19th analyst event, the more intrigued I get for playing for a bounce from what could be key long term support at $30 (red line), or just above where the 200 day moving avg sits (yellow line).
While we are not in the business of hopes and wishes, my generally undeterred bearish view on MSFT could be put on a hold for a short while if the stock were to continue to weaken to long term support. Stay tuned, we’ll be sure to update on the site if we make any moves.