I don’t know what to trust less – initial market moves or Steve Balmer…
At least the market has an excuse, it’s merely a compilation of the irrational (and sometimes rational) decisions of millions of traders across the globe, each reacting to information through their own filters. Ballmer, on the other hand, has accumulated $10Bn in MSFT stock because he is supposed to be on top of things in Redmond.
Why then, on Jan 30th, does the WSJ have him saying: "Microsoft Chief Executive Steve Ballmer said Monday that he expects Vista to sell twice as many copies in its first three months than Windows XP and five times as many units as Windows 95." (MSFT gains 2.5% to $30.86 on 1/31, Nasdaq gains 50 points in next 10 days).
Then, about 2 weeks later, on Feb 16th: "Speaking at a meeting with analysts, Microsoft (MSFT) CEO Steve Ballmer warned that some analysts are being overly aggressive in their estimates for sales of Windows Vista in fiscal 2008. “We’re driving it hard, but I think some people have gotten a little over-excited,” Ballmer said in a conference call that is being broadcast over the Web." (MSFT gaps down 2.5% to $28.74 on 2/16, Nasdaq drops 140 points in next 10 days).
Yesterday we get this news: "Microsoft said it sold 20 million copies of its Vista operating system in the first month of its consumer release, outpacing sales of earlier Windows versions. The software maker said the pace of Vista adoption is more than twice the rate of its predecessor, Windows XP, which sold 17 million copies after its first two months of release." (MSFT up 1% to 28.22, Nasdaq recovers 25 intraday points).
So I guess the question is: Was Steve Ballmer lying on Jan 30th, or on Feb 16th, or was the company lying yesterday or is Steve just so out of touch with something as basic as shipping and sales of the company’s core product that he honestly can do a 180 on the numbers every couple of weeks?
Let’s give MSFT the benefit of the doubt and just say they are despicable market manipulators who callously move the Nasdaq on a whim, causing great economic upheaval and billions of dollars of investor losses simply to push forward their own agenda. It’s not stupid at all to tank your stock while engaging in a massive buyback program, no sense in paying retail is there? UPOD is one thing but it’s totally irresponsible to "play" the expectations game when your stock is the fulcrum that moves the broader markets.
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In other market moves:
Despite housing numbers from hell we had quite an intra-day recovery in the markets.
- Dow came back from a 141-point drop to finish down just 11.
- Transports fell 50 points and clawed back 19 of them.
- S&P overcame a 13-point dip to finish up a point.
- NYSE fell 79 points but ended up 3.
- Nasdaq fell 23 points and finished up 4.
- SOX dropped 7 points and recovered 6 of them.
- Russell got back all but 1/2 of the 8 points it fell.
Oil seemed to have no doubts as it consolidated up along $63 all day. $62.50 is the 5% line for the week and if we spend another day above that, I’m not liking our chances for a meaningful pullback this week.
Gold is not very exciting considering all the international tension but every day above $660 is a chance for gold to gather strength for another run at $700. Kustomz points out that the dollar may be in dire straits as China and others begin to shift oil purchases to the more stable Euro and (gasp) Yen. With 85Mb of worldwide crude purchased each day at $63 per barrel, that’s $160Bn worth of dollars used per month! Even assuming that just on quarter of of those purchases begin to fund Jihads in Euros rather than dollars, that’s $500Bn worth of unnecessary dollars a year floating around.
This could become a problem!
