Hedge fund manager David Einhorn, who picked up 1.4 million Microsoft Corp. shares in the last quarter, is calling for the software giant's CEO to step down.
"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,'" Mr. Einhorn told the Ira Sohn Investment Conference . "His continued presence is the biggest overhang on Microsoft's stock."
Weary Microsoft shareholders can, no doubt, sympathise. The stock is down 13 per cent this year. An investor who put $100,000 into Microsoft stock 10 years ago would now have about $69,000 worth. Microsoft's shares have underperformed the S&P 500 in four of the past five quarters.
Mr. Ballmer isn't taking advantage of Microsoft's opportunities, Mr. Einhorn said. According to Bloomberg News, he likened Mr. Ballmer to Charlie Brown from Peanuts, a perpetual loser in sports and other pursuits, whose signature lament is: "Good grief!"
"Ballmer's problem is that he's stuck in the past," Bloomberg quoted Mr. Einhorn as saying. "He's allowed competitors to beat Microsoft in huge areas, including search, mobile-communications software, tablet computing and social networking. Even worse, his response to these failures has been to pour tremendous resources into efforts to develop his way out of these holes."
Microsoft shares rose 0.87 percent in premarket trading. Mr. Ballmer is the company's second-biggest shareholder -- with more than 333 million shares, or almost 4 percent, Bloomberg points out. Co-founder and chairman Bill Gates owns more than 561 million shares, or a 6.7 percent stake.
Many investors have been privately critical of Mr. Ballmer, but Mr. Einhorn's remarks are the most pointed yet from a high-profile investor. He is president of Greenlight Capital Inc., which holds 9.07 million Microsoft shares, worth worth $230.2-million (U.S.).
Mr. Einhorn, whose hedge fund manages $7.8-billion, criticized Lehman Brothers' accounting during a speech at the same conference in 2008. Four months later, Lehman filed for the largest bankruptcy in U.S. history.