Last week, Microsoft reported it generated more than $20 billion in revenue and made over $6 billion in net income for the first quarter of 2013. Despite the good news, a new report claims a well-known hedge fund is planning to announce it has bought a significant amount of stock in the company as part of a plan to potentially force Steve Ballmer out of his chief executive position at the tech giant.
CNBC, a business network on cable TV, reports ValueAct Capital is planning to buy a $2 billion stake in Microsoft, which would be about one percent of the company"s total worth. The story was first revealed on CNBC"s Twitter page:
ALERT: ValueAct takes $2B stake in Microsoft. QUOTE: cnb.cx/VaJEzh $MSFT (via @davidfaber)
— CNBC (@CNBC) April 22, 2013
ValueAct Capital was formed in 2000 and is run by Jeffrey Ubben, who will apparently reveal more about his intentions later today at an investment conference. StreetInsider.com reports that speculation has centered on Ballmer. It"s possible that Ubben may try to use his stake in Microsoft to lead other investors in an effort to get rid of the chief executive.
There"s also speculation that Ubben might try to convince shareholders to break up Microsoft. Microsoft"s stock price has gone up more than four percent since the news of ValueAct Capital"s stock purchase broke.
Source: CNBC on Twitter