On the heels of Microsoft's weak Q4 FY2013 earnings disclosure, Reuters is reporting that ValueAct Capital is negotiating for a seat on the Microsoft board.
Microsoft officials declined to comment on the July 19 Reuters report about the San Francisco-based fund's alleged activities.
ValueAct Capital's founder Jeffrey Ubben, took a $2 billion stake in Microsoft in April of this year. At that time, as the Wall Street Journal noted, ValueAct held less than one percent of Microsoft's total stock outstanding. (Reuters today said it's about 0.4 percent, but claims ValueAct may be buying more.)
While some have interpreted ValueAct's move as evidence that activist shareholders would try to unseat Microsoft CEO Ballmer, Ubben never has indicated (at least publicly) that this was his goal. Instead, Ubben indicated that he believed investors haven't fully appreciated the future importance of Microsoft's enterprise software and back-end infrastructure powering the cloud.
Some company watchers have indicated Microsoft's $900 million write-down of its Surface RT devices is evidence that Ballmer's attempt to remake Microsoft as a devices and services company is ill-advised and floundering. Some others (like me) believe it's too early in the makeover to claim it's a failure.
Microsoft officials haven't said how many Surface RT devices they've sold since the company launched them in October 2012. And they aren't saying how many they've made or how many are in inventory. (I have heard from a few of my sources that estimates of 6 million still remaining in the channel are considerably off.)
Ballmer recently told the Seattle Times there is a succession plan at Microsoft, but declined to discuss the particulars and/or the date he plans to leave his CEO post. (There's been speculation for years as to who would make the best, next Microsoft CEO.) Ballmer was a visible presence at the company's internal sales conference, known as MGX, in Atlanta this past week, from the few tidbits I've heard/seen.
Ballmer's last official pronouncement on his planned retirement date was in 2008. He said at that time he planned to stay at Microsoft until his youngest son was off to college, which would mean some time in 2018.
Microsoft's far and away largest shareholder, Chairman Bill Gates, is seen as a big Ballmer backer and close personal friend.
Microsoft's shares were down more than 11 percent today after yesterday's earnings report.