Microsoft should replace Ballmer, says Einhorn

Greenlight Capital Inc President David Einhorn called for Microsoft Corp board to replace CEO Steve Ballmer, saying the software maker suffered from “Charlie Brown management”.

Ballmer is weighing on the company’s share price, Einhorn said yesterday at the Ira Sohn Investment Conference in New York. Even so, he recommended Microsoft shares because the stock traded at a “remarkable discount” to the Standard & Poor’s 500 Index, while the business outperformed the average S&P company. Microsoft is Greenlight’s eighth-biggest US stock holding.

“It’s time for Microsoft’s board to tell Steve Ballmer: “All right, we see what you can do, let’s give so-and-so a chance,”” Einhorn said. “His continued presence is the biggest overhang on Microsoft’s stock,” he added.

Ballmer (55) has come under increased scrutiny from shareholders as the company loses market share to Apple Inc and Google Inc in mobile phones and Apple’s iPad takes sales from personal computers running Microsoft’s Windows. Last year, the board docked Ballmer some of his potential bonus for falling short in the mobile industry and new forms of computers.

Greenlight, a New York-based hedge fund, added 1.39 million Microsoft shares last quarter, for a total of 9.07 million, according to a filing. The stake is worth $230.2 million. Microsoft’s shares have underperformed the S&P 500 in four of the past five quarters.

Frank Shaw, a spokesman for Redmond, Washington-based Microsoft, declined to comment.

Top shareholder
Ballmer is the company’s second-biggest shareholder — with more than 333 million shares, or almost 4 per cent. Co-founder and Chairman Bill Gates owns more than 561 million shares, or a 6.7 per cent stake, according Bloomberg data.

Microsoft climbed 30 cents, or 1.2 per cent, to $24.49 at 9:37 am New York time in Nasdaq Stock Market trading. The shares declined 13 per cent this year before today.