It’s no big surprise that Steve Ballmer has either chose to leave Microsoft or was asked to leave Microsoft – I think the writing has been on the wall for awhile now. What I find interesting is the timing of the announcement.
Some people may attribute the timing to this recent article about an activist investor group gaining support from Microsoft shareholders. There may be something to that, but that has been ongoing for several months. Why would the announcement come approximately 1 month after reporting full year results? Wouldn’t it made more sense to at least announce they are discussing a succession plan as part of the year end report (Microsoft’s year end is on June 30th) and at least hint of a potential change?
My theory is some really bad sales numbers came in – proving to the CEO that there is no turn around in sight. This could be something like shrinking phone market share, poor Xbox projections or drop in Enterprise sales. Perhaps realizing the ship is sinking, the time to move on was now.
The announcement of Steve Ballmer’s departure caused Microsoft stock to surge over 7%. If my theory is correct, and you are a holder of Microsoft stock, this would be the time to sell. No CEO will be able to turn this around in the short term – and Microsoft has dug itself a pretty big hole to get out of as it looks to re-position itself as a device and services company. Microsoft is entering markets with formidable competitors. It will be interesting to watch who is picked to try to reboot Microsoft.