Microsoft, an America multinational technology company having her headquarter in Redmond, Washington, United State of America. The Company was formally founded by both Bill Gate along His counterpart Allen Paul, specifically on April 4, 1975. Currently, the CEO of the company is Steve Ballmer and the company is into development, manufacturing and licensing of several technology product ranging from Personal Computer (PC), Software and partly Hardware, though most of the time several hardware are not manufactured from the company that own the end products but till date Microsoft has been acclaimed to be the World most valuable company, though controversy abounds regarding that, Also by Revenue measure the company is also regards and the World largest software maker.
Memory down the lane:
The two friends as its no more a story, that Bill Gate and Allen Paul are two tight-close friends that love computer programming and they venture out to explore their talent and come up with their first company in 1972 namely Traf-O-Data, as at then they were both concerned with the rudimentary computer that analyse and track automobile traffic. Allen was actually the one that coin the word Microsoft (Micro-soft i.e. Microcomputer and Software), they both attend different institution, Gate attends Harvard while Allen attends University of Washington only that He (Allen Paul) dropped out to work for Honeywell.
Product churned out of this company are Windows, Office, Dynamics, Azure, Xbox, to mention but a few.
Initial Public Offer (IPO) –
Microsoft like any other company with Bill Gate was contemplating either to go public or not and there is enough internal conflict. The first IPO was review to be $21 but the first trade take-off at $25.50 a share, which is simply an indication that the demand for the stock is highly fierce and the share actually closed at $27.75 and peaked $29.25 a share shortly after the opening.
The share is actually aimed at 2.5million but it is shocking to know that quite number of investor has been waiting for the IPO where the targeted number was subscribed even before the share (stock) goes live for offering at all. By so doing, the stock makes the duo an instant millionaire. As at March 16th, 2006, Bill Gate still own 45 percent of the company share which as at then worth $24.7million outstanding share, while Allen still own 25 percent of the company share.
Since the time Microsoft goes IPO and the company is liken to public own the share hasn’t be stable, but the instability of Microsoft share and for the fact that the company want to scale has cause the company about nine different time to split, from the IPO till date, out of which 7 out of the nine mention are actually 2-for-1, and to further maintain the shareholder and give them sense of belonging when money is made at the end of each, thereby calls for the remaining 2 of the nine to be 3-for-2 and if the mathematics is correctly carried out, imagine a unit of the share as at IPO will yielded 288 unit as at eight years ago (2003), and till date. So at the closing price as at this stated period the value of a unit share then is $27.69 and going through the calculation again, one tend to get the value as of then to be $7974.72
Issues around instability of the company stock:
At time most financial personnel and the financial institution cannot categorically project the future of the stock of a certain company. Then the Bear and the Bull take the risk of putting in their money and be positive about the company performance in business. The world largest software maker is ever undergoing unprecedented changing as of now and some of the company software and license are actually still client-locked software, because less are the people that fall in love with their product, a good example, going by the range of software that has exist for a little while, User/Client are still loyal to a particular product which is the Microsoft XP, and also from my personal opinion, I believe, that happen to be the only Microsoft has actually taking time and also must have endow the version of the operating system which actually is still the rugged of all the Operating system and almost all the support required to fully Function which I believe that makes quite number of user/client stick on to it. On that note, the only thing that will work or simply put that might be the whaow factor and how fully efficient is the new product will be of daily simple-use like that of Window XP cause from the unit sold in Africa and taking Nigeria as a whole it shows that quite number of consumer are not ready to change Operating System and even the Big banks in Nigeria still locked up on this Operating System.
An interesting way to look at the increase in Microsoft, since it went public:
If you look at today’s MSFT closing price of $27.69 down 6 cents; the March 1986 IPO price, accounting for 9 splits, would have cost you 9.7 cents. That would be almost what MSFT lost in value today. So 970 cents invested i.e. $9.70, would now be worth $2,769.00. Although quite a good record, the stock has lost value since its peak of about $60 in early 2000.
Someone who invested $10,000 in the company’s IPO would own a stake worth roughly close to $3,000,000 today.
Microsoft as at current
Microsoft as of today, has wake up to the task of the day, few years back the company was reluctant on some issues like product update, hardware improvement, license issues, which, personally, I believe should not be an issue if the company only remind themselves of their major purpose and goal. I will like to stress this at this point, that for as many company that might want to remain active and focus, should ask themselves this three questions: the what, the how and the why? What is the purpose of existing, what are the solution our product and service want to offer? The How, How do we want to achieve this?, the strategy, measure and logical sequence of getting it done, and finally the Why, I need not emphasise on this, because this I believe is the question that Microsoft never ask themselves along the line, when they missed it. So, it take Microsoft, much time to realise that Windows XP, needs another upgrade and then comes Windows Vista, and in the wake of this, the company discovered the need and some basic flaws with Vista and then, come up with Windows 7, and during this period Android comes to play which hinted Microsoft to cross to the mobile platform and this tends to be the advent of Microsoft Windows phone with partnership with several other OEM, which Nokia is one of them, the era of WindowsPhone 7, then WindowsPhone7.1, 7.5, 7.8 and the era of Windows tablet as the world is going mobile, then the likes of Slate which is the dawn and simply because they have wait this long they have also lose some of their market in some region.
Other products comes from the company but till date their impact was not much felt at all in term of revenue and it does not tell on the price of the company stock/share.
Microsoft jumped 6 percent as the company relied on corporate software demand to make up for weak consumer personal-computer purchases. Microsoft rallied 6 percent to $35.73. The world’s largest software maker is undergoing unprecedented changes, conducting it’s first-ever CEO search to replace Steve Ballmer and starting an organizational overhaul aimed at bolstering sales by focusing on devices and services.
But Microsoft’s stock has recovered since the Nokia deal. It rose another 3.3% in Wednesday trading to $37.87 and is up more than 40% in 2013. Reuters recently reported that ValueAct is also playing a role in Microsoft’s search for a Ballmer replacement and is getting the same kind of access to the final CEO candidates as other board members.
Activists are clearly starting to take aim at larger companies, but it’s unclear how effective their strategies will be because they can only control a relatively small percentage of the shares of big companies. In another example, activist billionaire Carl Icahn is trying to get Apple to repurchase a large amount of its shares. Which probably is another case to look into as to market index, share, stock and decision to be made by several body of the board of Director of companies, if this is the new way to lead and make revenue.
On the upside, shares of Microsoft Corp.
MSFT jumped 4.2% to close at $38.18 after Reuters reported late Tuesday that the company has narrowed down its “shortlist” for CEO candidates, which reportedly include Ford chief Alan Mulally and former Nokia CEO Stephen Elop. Former Skype CEO Tony Bates is also reportedly on the list of candidates. The candidates are being considered to replace outgoing chief Steve Ballmer.
“We believe many investors are effectively being caught ‘off sides’ on Microsoft, still focusing on what could go wrong with the fundamentals, rather than what could go right with new management and likely changes in cost structure, disposition of money losing consumer businesses Bing and Xbox, corporate governance changes and financial engineering potentially extracting a lot more value out of the current assets,” Sherlund wrote. “The harder issue will be repositioning the product portfolio to address faster growth opportunities for the enterprise cloud businesses and what it means to deliver innovative new consumer productivity products.”
Regardless of the leadership of a company, the focus of company needs to be structure and the company remind themselves of the reason why they exist almost every morning before beginning the day activities. The idea and innovation needs to come from all the staff for the growth of the company and not lies only in the hand of the board of directors. Comparing Microsoft and the year of existence to Google and her years of existence with the price of their shares in this current era, the difference is strictly and clearly shown.