Tuesday, November 02, 2010

Excusing Microsoft's Dismal Performance

Last week I watched a brief piece on CNBC discussing Microsoft's performance of the last ten years. Recently, I wrote this post which touched on the same topic. I wrote,

"The next chart shows the same two series for a much longer timeframe. In that chart, you can discern that Microsoft has actually lost value over the past decade. More so than the index."

In the CNBC discussion, two fund managers with opposing views were pitted against one another on the occasion of Bill Gates' birthday.

What amazed me is that, despite the admission of a decade of non-performance, the CNBC anchors refrained from criticism of the company. Instead, they seemed to want to favor the opinions of a fund manager who claims that the firm's cashflow will now rise, and the XBox proves the company is still innovative.

I can't think of many companies with a flat ten-year equity price performance that roughly apes the S&P which would enjoy this sort of media treatment.

But standards seem to be different either now, or in the case of Microsoft. In closing, the usual statistic of how much $1,000 invested in the Microsoft IPO would now be worth- it is, of course, several million dollars.

One of the anchors spoke approvingly that, regardless of the company's last decade, wasn't it great that Bill Gates is giving nearly all his money to charity.

Evidently, that makes the company's poor treatment of its shareholders acceptable.

No comments: