Yesterday in after-hours trading, Microsoft picked up a minor gain. The trading period was interesting as news that Microsoft’s board was tipped to select its own Satya Nadella as its next CEO had broken.
This morning, the company’s stock has risen more than 2 percent in a generally down market day. Investors appear at least blasé with the CEO choice.
If Microsoft had fallen sharply, or risen dramatically directly following the news, that would have been a different sort of signal.
Is it negative that Microsoft’s stock didn’t spike following the Nadella news, perhaps indicating that the company could have done better in its choice? You could read it that way, but I think two things can force us — for now — to not be too negative. Primarily, Microsoft has not announced the news itself, so we’re still discussing probabilities and potentialities, no matter how strong the sourcing is.
And secondly, I doubt that the street is too familiar with Nadella. Uncertainty is usually a sell, sure, but Nadella’s coverage has generally mentioned his strengths, perhaps providing some mental insurance to the trading classes.
The caveat, naturally, is Nadella’s weaknesses — such as they are. I’ll be digging into this later today, but the simple summation is while he is tops at technical work and enterprise-facing efforts, he lacks commensurate experience with consumer products and hardware, and could therefore lack the leadership and vision he needs to drive Microsoft forward in those key areas.
For now, however, the market is telling Microsoft it is fine with its supposed choice.
Top Image Credit: Dan Taylor/Heisenberg Media