Homeless in Arizona

But you gotta hand it to Bill Gates for turning this absolutely sh*tty operating system into a billion dollar success for himself and Microsoft.

Sure Bill Gates couldn't code his way out of a page page, but he has done a fantastic job as a businessman.

I'm sure I can code circles around Bill Gates, but I admit wouldn't have turned MS/DOS and Windows into a billion dollar or maybe even trillion dollar success story.

Years ago I ridiculed Bill Gates for giving the finger to IBM. But Bill Gates was right on that and I was wrong.

Source

Microsoft stock drops signals Nadella's honeymoon may be ending

Marco della Cava, USA TODAY 4:33 p.m. EDT April 22, 2016

SAN FRANCISCO— Microsoft lost nearly $30 billion in market value Friday after a shortfall in revenues — in part due to disappointment over its cloud business — bruised some of the hopes pinned to CEO Satya Nadella's turnaround of the company.

Microsoft shares (MSFT) lost 7% to $51.78, sliding 9% off a 52-week high of $56.85, and bringing its market cap to about $409 billion. In the days leading up to results, Microsoft had been homing in on its 1999 high. The day's drop weighed on broader stock market indexes.

Microsoft shares plunge as results show growth is elusive in post-PC market

"Overall, the market bid up shares (in Microsoft) without factoring in the risks of the company's pivot (to a cloud- and mobile-first business model)," said Colin Gillis of BGC Partners. "We've got a hold rating on the stock, because we want to see these things get worked through. We're moving from the excitement of a new CEO with the right plan to a time when execution is critical."

On Thursday evening, Microsoft announced FY Q3 results that included a 6% decline in fiscal third-quarter revenue to $20.5 billion. Earnings of $3.8 billion, or 47 cents per share, fell 25% year over year. Both sales and adjusted earnings of 62 cents per share fell short of forecasts.

The week was a tough one for a variety of technology companies.

Shares of Google's parent company Alphabet were down 5% Friday (GOOGL) after the company reported misses on EPS and revenue due in large part to continued investment in its "moonshot" projects such as autonomous cars, which have yet to transition into profit-generating businesses. IBM (IBM) also experienced a drop, its shares sinking 7% to $142 Tuesday before rebounding to $148.

Microsoft's stock drop follows what amounts to a long honeymoon period that Wall Street granted Nadella, who was taking over a troubled company still stuck in an old business model and saddled with questionable acquisitions such as handset maker Nokia.

"They still have a global brand, a strong share in key businesses like the cloud, and a foothold in next-gen opportunities such as mobile and augmented reality with HoloLens," says Scott Kessler equity analyst with S&P Global Market Intelligence, who cut his 12-month target $5 to $55. "Right now for them to go from no growth to slow growth to something really exciting might just take longer than people appreciated."

Nadella has spent the past two years as CEO pivoting his company from a legacy business anchored to software licensing sales to a cloud-first business that hopes eventually to generate recurring revenue from cloud service subscriptions.

That shift will require patience from the market, says Robert Stroud, principal analyst with Forrester.

"This (stock drop) is a natural reaction from the market because of the miss on revenue, but Nadella is focused on the shift to the cloud (where revenue grew a modest 3% to $6.1 billion in the quarter) and that's a business where generally they're doing well," says Stroud.

Amazon leads in cloud services, with 30% of the global market, but Microsoft has made steady gains in the past year and currently has 10% of the market.

Stroud says that switching the company to a subscription service "will be very valuable in the fullness of time," and puts the recent stock drop down to "transition pains and maybe overzealous estimates about the company's progress. If (the earnings report) had been really bad, I would have expected a much bigger drop in the stock."

Some analysts expect Microsoft's next quarter, which ends its fiscal year, to feature good news in the form of increased Xbox revenue given that it is a traditionally strong quarter for the company's gaming business. But looking for big gains in other parts of the business may still take time and investor patience, says analyst Gillis of BGC Partners.

That said, Gillis adds that in the larger scheme of things, tech monoliths such as Microsoft and Google aren't mortally wounded by the sort of stock drops seen Friday.

"Microsoft is up 24% over 52 weeks, and Google is up 33% over 52, including today's drop for both," he says. "That's still pretty good. Both these companies are doing fine."

Follow Marco della Cava at @marcodellacava.