Some days you really have to wonder...
Notice anything unusual there? That's right, of every stock I track, only MSFT was down today. Off .1% while the NAS is up a full 1.05% - and that's despite already under performing the NAS by ~6%+ year to date. WTF?
Reviewing the news, nothing particularly stands out as a likely cause for today's under performance. Nevertheless, the price action speaks for itself and volume is significantly above-average - so you can't write it off as meaningless. Now, in fairness, it was a triple witching day and that often causes some aberrant behavior. While that might explain the higher volume, why was MSFT the only issue from that fairly long list who was unable to close in positive territory? Sure, any stock can have a bad day, but we see this kind of action in MSFT repeatedly.
In the absence of material earnings acceleration and/or other investor-generating interest, there just doesn't appear to be any sustained incremental demand for MSFT whatsoever. Even a rare "bullish" PC analyst that I saw recently, recommended just about everyone but MSFT to play the trend - his specific worry being the long-term adverse impact from GOOG. Recall that with Vista, the new Office, etc. this was meant to finally be MSFT's big year. So far, for investors, it's been a bust. MSFT continues to be a piñata that exists purely to entertain large funds and institutions, who proceed to whack it up and down all day, every day - disgorging 10's or even 100's of millions of dollars for themselves in the process off fractional per share moves, while the overall direction remains flat and long-term holders continue to make nothing.
Current management appears to be mostly resigned to this state of affairs, even helpfully refilling the piñata every once in a while with some fresh shareholder buyback money and taping up the seams when it looks like maybe it's going down for the count. Then the Wall St. game starts all over again. As long as leadership continues to receive massive share and option grants for free, institutions continue to redeem those shares for cash in exchange for unfettered access to the daily piñata spoils, and shareholders continue to underwrite the cost via continued under performance without calling for heads to roll either at MSFT or at those institutions holding it, then life is good. MSFT's leadership can continue to run the company - as they have for this entire decade so far - as their private fiefdom and for their personal enrichment versus as a public company charged with rewarding its shareholder owners. And given the totally lackluster reception of Vista so far - at least in the consumer market - despite repeated Ballmer promises that it "would be great - bet on it", combined with continued reckless spending, it doesn't seem likely that we'll see earnings improvements that might drive [new] investor interest any time soon. Additionally, we're heading into MSFT's fiscal year end when, among other things, grants and options get set - and you know MSFT loves to game those to be as low as possible. So don't expect any major announcements from them aimed at driving the stock - like say a market dividend, or better yet Ballmer's retirement. Also expect buybacks to get curtailed significantly unless earnings are coming in weak and need to be juiced again by reducing shares outstanding.
Looking at the long-term chart, about the only potentially bullish takeaway is that you could make a technical analysis case for a run to $40 if this seemingly endless consolidation trend ever gets resolved to the upside. Whether it will before MSFT sees the major financial challenges that are almost surely on the horizon given the current strategy, leadership, and execution shortfalls, is any one's guess. Until then, MSFT likely remains what it's been since Ballmer took the helm as CEO in 2000: worse than dead money.
Time for a change. After nearly a decade, this is getting old...