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NEWS

Microsoft Shares Drop to 11-Year Low

Rob Crossley's picture

By Rob Crossley

February 25, 2009

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Microsoft saw its share price fall to an eleven-year low on Tuesday following a dissatisfying address at an analysts’ meeting in New York by company CEO Steve Ballmer.

Ballmer spoke of how Microsoft can benefit from the rise of cheap netbooks, but made little suggestion that the company is going to cut more costs to save money.

In fact, Ballmer openly rejected the idea, stating that "I don't think it makes sense for us to come back and say, 'Could we take out another $2 billion in costs?’”

Microsoft confirmed back in January that it was going to cut 5,000 jobs over 18 months in a bid to save itself over $2 billion, but many analysts feel the cuts are too slender, and expected Ballmer to announce more cost saving measures.

Following the investors’ meeting, Microsoft shares fell over 3 percent, down to $16.36. The shares are currently at $17.14 at the time of going to press.

Anonymous's picture
On February 25th athlete_gamer (not verified) said:

Closing down two of the most successful development studios in the history of gaming was a STUPID move by Microsoft:

Age of Empires is a GUARANTEED SUCCESS every time it is released on PC, yet Microsoft closed the development studio behind it.

Flight Simulator is a GUARANTEED SUCESS every time is is released on PC, yet Microsoft closed the development studio behind it.

Whoever made these decisions was an idiot who needs to be fired. Microsoft used to be a company that focused on keeping the best developers together because when great minds work together they produce great products and services. I wonder which of Microsoft's competitors all those great developers are working for now.

I say that those fired employees should create a couple of games called "Ages of Dynasties" and "Flying Simulation" and make the gameplay virtually identical to Ages of Empires and Flight Simulator, respectively. Then, they can still make the same profits, but without having to hand it over to Microsoft.

illiniphase4's picture
On February 26th illiniphase4 said:

True, and I agree with you to a point... but "guaranteed success" on the PC isn't what it once was, especially considering the niche market that FSim applies to. And with the way the market is right now, I can see them cutting departments that aren't going to be gold-mines in the foreseeable future. Now do I agree with it? Hell no. They were successful studios capable of delivering quality polished products on time with few issues or complaints. Once the markets stabilize, MS is going to hopefully bludgeon themselves to death for killing off these fantastic devs, particularly with Ensemble breaking off into two new dev studios who will likely make games for rival systems.

Smart moves in the short term, but provided MS doesn't go under during this financial mess, then completely boneheaded moves in the long term.

DubsTF's picture
On February 25th DubsTF said:

Couldn't happen to a nicer illegal monopoly.

I hope Ballmer stays on as CEO for a good, long time, at least until the stock price gets down into single digits.

squazzil4's picture
On February 25th squazzil4 said:

ok they need to sack Steve Ballsmer and get a proper CEO like Reggie Fils Amie. To quote Reggie's first speech.....

"My names Reggie and I'm here to take names. I'm here to kick ass. I'm going to kick everyones ass..... then kick back with a super serving of potato salad from my personal 57 topping potato salad bar. Then I'm going to eat 5 bags of cheesy nachos in 3min."

I dont hear Steve Ballsmer saying anything like that.

grognard66's picture
On February 25th grognard66 said:

I guess you haven't seen that video where Ballmer tried to give a pep rally to the troops, jumping around the stage and yelling like a madman. It was quite disturbing. :)

illiniphase4's picture
On February 25th illiniphase4 said:

No, what Reggie was actually saying was "I'm here to market a system that panders to the lowest common denominator."

Let's face it. There isn't a single gaming business out there that isn't going to feel the fire of this economy sooner or later. I would contend that MS's gaming division is still doing well, and that it is their software division that has floundered heavily on exceptions of Windows Vista, which from a business standpoint turned out to be a flop.

toadwarrior's picture
On February 25th toadwarrior said:

You forget that MS makes more than consoles and their operating system is all about pandering to the lowest common denominator so you should watch what sorts of digs you make towards the competition.

In the grand scheme of things the 360 is a very minor portion of Microsoft and it's their OS (Vista) that no one wants that is causing them problems and the fact it won't run decently on netbooks which is the largest growing sector of PC hardware at the moment.

They'll try to fix this with Windows 7 (ie Vista SP3) but I think they should watch themselves. They've crapped on people too many times and the economy is shit. People may simply stay with XP for a long time because it works which financially hurts MS.

NickgamertagO1's picture
On February 25th NickgamertagO1 said:

WTF!?

squazzil4's picture
On February 25th squazzil4 said:

yes I know.... I didn't believe it at first.

squarepusher's picture
On February 25th squarepusher said:

[quote]They are part of the crowd that got us into the worst financial crisis since the 30's. Let them eat cake.[/quote]

Sir, I'll think you find that the financial 'crisis' was brought to you by the same guys who repealed Glass Spiegel, created a derivatives bubble of 1 quadrillion and then popped the real estate bubble, laying all the blame on homeowners.

In other words, you've got 'government'/international bankers to blame for this crisis, and no one else. The same guys who are now acting as our saviours right now on the news, because they know the people are a bunch of suckers that will believe anything they hear on the news that is controlled by those same interests. PT Barnum's quote, 'There's a sucker born every minute', still rings true to this day.

The stock market is entirely fake, no one in the Congress pays taxes (least of all TImothy Geithner, now head of Treasury), and the laws exist for us, the shmucks. That is the harsh reality.

illiniphase4's picture
On February 25th illiniphase4 said:

Amen to that. Am I allowed to hate Congress if I'm still in the naval reserves? Oh well, let the hating commence...

*HATE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!*

Rob_Jackson's picture
On February 25th Rob_Jackson said:

Well, MS and people with enough stock to influence board room decision, kind of like what is better; a hungry shark or a shoal of pirana fish. Stock holders would be happy to see all staff laid off, the company asset stripped, and said share holders to take everything. I say ignore the whining bar stewards. They are part of the crowd that got us into the worst financial crisis since the 30's. Let them eat cake.

dreamhunk's picture
On February 25th dreamhunk said:

share holders are very wise they might also want to take a good look at this link

http://www.1up.com/do/newsStory?cId=3172968

yup people are pwning their consoles.

grognard66's picture
On February 25th grognard66 said:

Shareholders love layoffs and will always punish companies that don't pander to their desire for short-term profit. It was more than enough to layoff 5K positions when making a $4 Billion profit in anticipation of a worsening economy (and even that was probably unnecessary IMO).
Stock trading as it exists now is nothing more than legalized gambling. I really wish rules could be set where stockholders were forced to hold their shares for at least a year, to avoid the knee-jerk daytrading mentality that is contributing to this nightmare of an economy.