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Well, not necessarily idiots. I'm sure they understand the longer term value of those brands and products to Microsoft. Investors are not necessarily in it for
by jfoster 13y ago
Well, not necessarily idiots. I'm sure they understand the longer term value of those brands and products to Microsoft. Investors are not necessarily in it for the long-term, though. They might buy a substantial stake, pressure the CEO into cutting valuable (but currently loss-making) divisions, and be looking to sell that stake after a couple of really strong-looking quarters.
None of that is good for Microsoft, but the investors are potentially behaving quite rationally. (if a bit destructively...)
- Joeri 13y agoThis is the thing that is often glossed over when discussing what investors want out of a company. The primary goal of an investment is to provide a large return in a short timeframe, regardless of what happens after cashing out. Burning up a company's future to inflate short-term profits can be a perfectly fine strategy for an investor. You could argue that the last people who should have a say in how a company runs its affairs are the investors, because they are the most likely to make decisions that are bad for the company.