Goldman Says Sell MSFT

Goldman Sacs reported Rick Sherlund, an analyst saying, “PCs are a mature market in the enterprise space and in gradual decline. In the consumer space half the market does not need Office, so they don’t need Windows and don’t need Microsoft.”

Hey! That’s what I’ve been saying for 6 years. I guess I was a bit ahead of the high-rollers being at that time a computer teacher in the bush of northern Canada. On 2007-08-7, MSFT closed at $29.55. On 2013-04-12, MSFT closed at $28.79, pretty well dead in the water. Watch as the next quarterly report comes due.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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8 Responses to Goldman Says Sell MSFT

  1. oiaohm says:

    bw
    –On the other hand, when you call some company or other and talk to them, they are not sitting in front of a phone or tablet to look up your account info. They are still using a PC workstation and nothing is really on the horizon to change that.–

    Problem here is there is a lot of moving back to thin/thick client solutions in business for the Desktops. So more and more users at work are not sitting in-front of a PC workstations.

    Redhat is selling this very well http://www.redhat.com/products/virtualization/desktop/

    Microsoft market is under assault from two sides.

    Phones on one side and thin clients on the other.

    Yes virtualization provide windows means you now don’t need a copy of windows on every machine.

  2. ram says:

    Almost everything promoted by Wall Street is a con job, now and in the past. The massive fluctuations in stock prices reflects this. For most real large enterprises sales and prospects do not change all that quickly.

  3. Average User says:

    bw – “Given your dictatorial bent, I suspect that you do not play the stock market at all.”

    LOL. I suspect you don’t either. A couple years back M$ head honchos were dumping stock like crazy.

  4. bw says:

    “The point of TFA which you seemed to have missed is that the popular press no longer sees M$ as invincible, as a tech stock with growth potential or even as dominant in its field. ”

    “TFA”???

    I don’t think that the financial analysts (is that what you meant by TFA) have considered Microsoft “invincible” for about 20 years or so. Remember that Netscape was looked upon as a Microsoft Killer back in the mid-90s and there has been a search for “the next Microsoft” for an even longer time. I don’t think that was particularly noteworthy, so I did overlook it as a point.

    I guess that I have to pay for my snide remark in terms of its being too oblique and failing to convey my meaning, which was simply to poke some fun at the idea that a specious prediction from the dark past has any bearing on what is happening now. It is not the rise of Linux but rather the rise of cell phones and tablets that is causing decline in the PC world. Microsoft is so tightly bound to the PC world that it will decline in step.

    If people had not embraced cell phones and tablets, they would still be using PCs in increasing numbers and most of those would be Windows PCs. As it stands, a great deal of personal use of computers has gone to mobile devices. On the other hand, when you call some company or other and talk to them, they are not sitting in front of a phone or tablet to look up your account info. They are still using a PC workstation and nothing is really on the horizon to change that.

    I don’t think that Microsoft is really in “trouble”, at least with a capital “T”.

  5. Mats Hagglund says:

    http://techcrunch.com/2013/02/06/microsoft-considering-a-linux-version-of-office-in-2014/

    True or not but even considering this tell us how guys of Redmond are indeed in big trouble.

  6. bw wrote, “Did you go short then? Most likely not.”

    The point of TFA which you seemed to have missed is that the popular press no longer sees M$ as invincible, as a tech stock with growth potential or even as dominant in its field. This is the removal of one of the cards in the base of M$’s house of cards. Will it cause total collapse? Certainly not but from now on no OEM, retailer or investor is going to assume that M$ is a winning/”can’t lose” proposition. Five years ago this change was unthinkable for mainstream IT/press. Then you could not get fired for choosing M$. Now you may well be fired. That’s a huge shift in brand-perception or mindset.

    Goldman Sachs is not alone in the new realizations about M$. I have been seeing their products as trash for many years. Others have seen the light before me and after me. The trickle of doubt about M$ has become a torrent. Vista was a mere wakeup call compared to what is happening now. M$ has publicly stated that they are betting the farm on cloud and “8” and both are struggling. While M$ still has power over business because of lock-in there is now nowhere that everyone will see M$ as the proper default solution. Even businesses cannot ignore */Linux and smart thingies and thin clients etc. There are many options now other than M$ and they all look good.

  7. bw says:

    “I’ve been saying for 6 years.”

    Did you go short then? Most likely not. Given your dictatorial bent, I suspect that you do not play the stock market at all.

    It is a good thing that you did not act on your whimsy then, since MSFT went to a recent high of 37 barely 3 months later. You would have been looking at a big hole in your portfolio if you had bet Microsoft to lose back then.

    Of course you might have held on for a couple of years until George Bush got on TV and drove the market down to where MSFT bottomed out in the mid teens. There have been a lot of ups and downs in the intervening days and your “predictions” are not material.

    Six months or so ago, Goldman thought Costco was the thing to sell, too, and it almost doubled, so be a bit jaded about such free advice. And don’t go all in on a pair of queens.

  8. Mats Hagglund says:

    Microsoft – like a DDR (East Germany) of IT? At least partly true. Never been a real innovative Co. Slow and degenerated. Remnant of 1990’s.

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