Greenlight Capital’s David Einhorn calls for Steve Ballmer’s resignation

May 26th, 2011
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David Einhorn, a prominent shareholder activist and founder of hedge fund Greenlight Capital, told attendees at the Ira Sohn Investment Research Conference yesterday that he wants Steve Ballmer to step-down from his role as Chief Executive Officer of Microsoft Corp (NASDAQ: MSFT). According to CNBC, Einhorn stated that Ballmer’s “continued presence is the biggest overhang on Microsoft's stock.”

Several experts, including Ironfire Capital’s Eric Jackson, have publically supported Einhorn’s criticisms, but most agree that Microsoft’s board is too cozy with Mr. Ballmer to force his resignation.

Despite criticisms and lackluster stock performance, MSFT’s divisions have consistently generated large amounts of cash. I believe that MSFT is currently undervalued and if the calls for a management change gain momentum, MSFT’s stock could appreciate significantly. Ironically, Mr. Ballmer could potentially be one of the greatest benefactors of his own demise, since his $8.06 billion stake in the company would likely jump significantly following the announcement of a regime change.

According to Q1 filings, David Einhorn’s Greenlight Capital holds 9,069,042 shares or nearly $230 million of MSFT’s stock. Mr. Einhorn, who co-founded Greenlight in 1996, made a name for himself during the financial crisis when he predicted Lehman Brothers’ downfall.
For Detailed Investor Profiles on these Investors, click below:
Greenlight Capital
Ironfire Capital
Related People: Bruce Gutkin; David Einhorn; Eric Jackson; Harry Brandler; Jackson Leadership Systems, Inc; James Lin; Jeffrey A. Keswin*; Nelson Heumann; Vinit Sethi
Related Entities: DME Advisors LP; Greenlight Capital Inc; Greenlight Masters LLC; Greenlight Private Equity Partners; Ironfire Capital US Fund LP
Related Article Tags: Shareholder Activists, Corporate Raiders and Proxy Battles; Featured Reports

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