Tuesday, July 23, 2013

Microsoft's Troubled Road

The declining PC business matters,according to Dan Niles,co-Chief Investment Officer at asset manager AlphaOne Capital Partners.Enterprise is still tied to the PC business.Microsoft missed estimates in all five revenue segments.The problem is,you're gonna have more tablets sold than PCs in Q4. Microsoft is a great cash flow business.It's a software company,but it's on the wrong side of the market.It has a good quarter mixed in here and there.Until they figure out how to have a strong smart phone and tablet,they're on the wrong side of a business transition. Google is in a good spot with Android.Eventually,this mobile transition will run its course.For Microsoft,you need stabilisation in the PC market.In 2-3 years from now,you might reconsider the stock. Mr.Niles,Senior Portfolio Manager of the AlphaOne Satori Fund,has a negative position in both Microsoft and Google. Microsoft is currently undergoing a restructuring,in an attempt to better navigate the shifting business landscape. Microsoft(MSFT),Google(GOOG)

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