David Einhorn refers to Microsoft as sinking ship, dumps stake

David Einhorn, president of Greenlight Capital, a hedge fund company, has just withdrawn his stake from Microsoft and placed his bet with Apple instead. In a brutal bashing of the company, he stated that Microsoft is at risk of becoming a shrinking company. He further compared them to Yankee player Alex Rodriguez, with their products failing and their value declining.

According to him;

Windows 8 appears to be a flop, and a decade of mismanagement has put Microsoft at risk of becoming a shrinking company. We were pleased when an activist gave the stock a boost, giving us the opportunity to exit with an annualized high single-digit return that slightly outpaced the market during our lengthy holding period.

Einhorn however, also invests in Apple and predicts that despite the falling share price, Apple will return to profitability soon and they will begin to make gains.

This is not the first time he's butted heads with Microsoft, in 2011 he called for Steve Ballmer's resignation claiming that Ballmer's leadership skills weren't exactly the best and stating that the stock would be worse for it.

It is however not stated how much he had actually invested in the company and how much profit he made.

Balancing out David Einhorn's loss however is ValueAct Capital who reportedly bought a state in Microsoft this week for $2 billion helping to increase confidence in the company.

Flip-flops like this are not uncommon between Microsoft and investors.

In the past year, Microsoft's stock has seen a lot of ups and downs with the stock falling in late 2012 due to investor worries and rising after the Microsoft reorganisation exercise.

Source: Business Insider | Image: Greenlight Capiital

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