ValueAct Still Pursuing A Microsoft Board Seat, Wants To Sell Off The Xbox Division

Steve Ballmer just announced his retirement, and the CEO of Microsoft has decided to call it a day within the next 12 months. The head of Redmond had been under fire from several circles, former employees, media and investors.

Back in April ValueAct spent $2 billion in order to take over 1 percent stake in Microsoft. And now gossip is flowing that the investment firm may be pushing for some big changes within the Redmond campus.

A top Microsoft analyst reveals that ValueAct is still pursuing a seat in the company’s board of directors.

This new report over at BizJournals has Nomura analyst Rick Sherlund claiming that as far as Microsoft is concerned, important changes are likely to take place in the company very soon.

Sherlund recently upgraded Microsoft’s stock to a “buy” rating wrote in a note that ValueAct is very likely to receive the support of other shareholders in its quest to get a seat in the board. The reason being that the investment group wants to get rid of Steve Ballmer — and it is not the only one:

“A decision by the board at Microsoft to offer a nomination for a board seat could keep the activist agenda behind closed doors and take longer for shareholders to see potential benefits.”

ValueAct is said to be looking to replace the company’s CEO because his strategy inspires little confidence. However, no other name that could take over the reins at Microsoft has been provided.

Along with pushing for Steve Ballmer’s exit, ValueAct is also said to be trying to get rid of the Xbox division. The new shareholder actually believes that Microsoft would do better without it, and selling it to another technology company would allow Redmond to focus on its key products like Windows:

“Xbox is cool, but by our estimates Microsoft has not made money at this.”

It appears that as of right now, Microsoft administration has no other choice than to give ValueAct a board seat — the investment firm might otherwise launch a public war on Steve Ballmer.

That, for Microsoft, would have much more serious consequences, even as it searches for a new leader.

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