Microsoft without Bill Gates?

Tuesday’s semi-euphoric stock-market greeting for the start of the government shutdown is giving way to a more sober reaction. The major indexes opened lower this morning, with the S&P 500  (SNPINDEX: ^GSPC )  and the narrower, price-weighted Dow Jones Industrial Average  (DJINDICES: ^DJI )  are down 0.74% and 0.84%, respectively, at 10:25 a.m. EDT. That may be a more appropriate response if yesterday’s front-page Wall Street Journal headline, “Capital Digs In for Long Haul,” proves prophetic.

According to payroll processor ADP, private employers added 166,000 jobs last month, missing economists’ forecast for 180,000. In addition, the figure for August was revised down to 159,000 from 176,000 — lackluster numbers, indeed. With the Department of Labor unlikely to release its September employment report due to the shutdown, the ADP data will stand alone this week, and it doesn’t provide the sort of background music that will have equity traders rushing to the dance floor.



More change in the cards at Microsoft?

The winds of change aren’t letting up at Microsoft (NASDAQ: MSFT) . Just two days after CEO Steve Ballmer gave an emotional final companywide address, Reuters is reporting that three of the software concern’s top 20 investors are pushing for Bill Gates to step down as chairman of the board.

As the co-founder of Microsoft, Gates remains its largest shareholder with a 4.9% holding, but that stake is set to go to zero by 2018 under a plan of regular stock sales. According to Reuters’ report, the trio of investors who would like him to step down own 5% of the shares in aggregate and feel that Mr. Gates’ influence at the company is disproportionate with his economic stake, particularly as he sits on the committee that is searching for Steve Ballmer’s replacement (incidentally, The Wall Street Journal recently put together an excellent profile of the man who heads that committee, John W. Thompson).

I’m torn on the question of whether Bill Gates should remain Microsoft’s chairman. On the one hand, I understand the drive for new blood in that role to coincide with Mr. Ballmer’s succession. Furthermore, for all his achievements, I don’t think Mr. Gates has been particularly effective as a technology visionary — on that front, he doesn’t approach his late rival, Apple‘s Steve Jobs. Nonetheless, I do think he has improved corporate governance at Microsoft, partially as a result of the influence of his friend, Berkshire Hathaway CEO Warren Buffett.

Replacing Gates at this time certainly presents a risk. However, as the company embarks on a new devices-oriented strategy to compete with Apple and Google, it may well be a risk worth taking.

The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get 3 Stocks for the Great Dividend Boom in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

A version of this article, written by Alex Dumortier, CFA, originally appeared on

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.