A famous hedge fund manager wants Microsoft CEO Steve Ballmer to go and let someone else lead the company, but the chance of that happening are slim.
David Einhorn, head of the hedge fund Greenlight Capital, on Wednesday outlined why Ballmer needs to go. We know the complaints by now: Microsoft missed the mobile curve and has no answer to Apple's iPad. In addition, Microsoft is overpaying for Skype and other deals.
Einhorn, who spoke at the Ira Sohn Investment Conference, is best known for criticizing Lehman Brothers before it unraveled. Einhorn is only saying publicly what others mumble. The problem is that Greenlight holds 9 million shares or just 0.11 percent of outstanding shares, according to Thomson Reuters.
In other words, Einhorn would have to rally a lot of shareholders to his boot Ballmer cause. The top 10 Microsoft investors go like this via Thomson Reuters data:
- Bill Gates own 6.65 percent of outstanding shares, or more than 560 million shares.
- Ballmer owns 3.95 percent of Microsoft's outstanding shares, or 333 million.
- Capital Research owns 3.56 percent, or more than 300 million shares.
- Vanguard owns 3.44 percent of Microsoft.
- State Street owns 3.43 percent.
- BlackRock owns 3.05 percent.
- Capital World, JP Morgan, T. Rowe Price and Fidelity all own about 1 percent to 1.5 percent of Microsoft.
In other words, Einhorn needs to convince Gates and Ballmer that Ballmer needs to go. Good luck with that pitch. Meanwhile, mutual funds aren't killing it with Microsoft shares, but they are collecting some nice dividends.
Given the realities of the shareholder pecking order is it any wonder that Microsoft shares are up only slightly following Einhorn's comments?
Here's a look at the 5-day chart: