Steve Ballmer is retiring and MSFT is up more than 7%. Buy it?Discussed in this article: Microsoft Corporation ( $MSFT )
I want to look at Microsoft ( NASDAQ:MSFT ); on Friday the company announced that Steve Ballmer, CEO of Microsoft ( NASDAQ:MSFT ), was going to retire. So what happens? The stock is trading up big pre-market, it opened up at 35.16; it promptly traded up another four cents and then started to trade down all day.
Nothing against Steve Ballmer, but this is what the market did, the market voted by buying this stock, why? Because Steve Ballmer is leaving. Does the market hate Steve Ballmer? No, apparently the deal was that the guy just stunk up the joint when it comes to spending money; he spent like a gazillion dollars on Skype, how’s that working out for you? Just not a real good steward of the money, the cash cow that Microsoft ( NASDAQ:MSFT ) has.
And so with him leaving the market is saying, “Hey, they’ll probably I’ll get somebody in there that’s better, right?” Someone that’s going do a better job. Well here’s what I’m saying; you look at the weekly chart on this, the stock has been violent, there’s no question about it, we can talk about, well if you bought here you doubled your money. That’s true, if frogs had wings they wouldn’t have sore butts from jumping around so much too.
But as I look here at the stock, again, on the weekly chart, I would say, “Okay, well this kind of looks like a pretty decent consolidation here, so I’m going to want to buy this stock, when?” First of all I’m not interested in buying Microsoft ( NASDAQ:MSFT ) but there are a lot of people that are, it traded at 345 million shares this last week. But if you are inclined to buy Microsoft ( NASDAQ:MSFT ), why do you want to buy in this trading range?
Instead, wait for the stock to break out to a new high; that will give you the sense that this trading range is over. By the way, look at the time frame; it’s 2013, so this thing has been trading in a sideways range for most of the year. You look at the daily chart and you get a better sense of what I’m talking about. I’m saying, if Microsoft ( NASDAQ:MSFT ) doesn’t break through, say 36.50, I wouldn’t want to buy this stock.
My suggestion is, if you bought this stock on the news that Steve Ballmer is retiring, you need to sell this stock on the news that Steve Ballmer is retiring, because it’s still the same old Microsoft ( NASDAQ:MSFT ). Maybe they’re going to do things a little bit different, but they aren’t Apple ( NASDAQ:AAPL ), they aren’t Facebook ( NASDAQ:FB ), they’re still just Mr. Softie.