Microsoft Needs CEO, Not Dividend Boost

 | Sep 17, 2013 | 9:42 AM EDT
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Microsoft (MSFT) is up this morning because it's raising its dividend by 22%.

However, this "boost" is from a longstanding tradition of hiking the dividend in September. It comes after the stock has wilted following the decision to buy Nokia (NOK) and get into another line of business.

The stock will be stuck in neutral until they name a new CEO -- and that likely will take a couple of months. At the moment, there is one front-runner: Stephen Elop. He is an insider who Microsoft can try and present to investors as an outsider. Because Bill Gates knows Elop and trusts him, you can count on Elop not rocking the boat too much.

There will be a dance that goes on. Gates likely doesn't want Elop to blow up the company he built. Elop wants the job, so will promise Gates not to do that.

Elop does have more than a little bit of an itch, however, to make some big changes. After all, when he was at Microsoft he pushed the company full throttle into cloud. That move turned out to be a big win for the company, for which it's not given enough credit. Therefore, Elop is likely to tinker over time on what Microsoft is and try and reshape it -- with Gates' blessing of course.

But out of the gates, investors will see and hear a message of "stay the course" from Elop, and they probably won't be too jazzed about it. However, we need to get to that CEO announcement before the stock can start to move upwards again. Right now, dividend or not, it's stuck in neutral.

The wildcard of Bill Gates naming himself CEO is intriguing to watch. So far, he's given no indication he wants the job, but that doesn't mean anything. He's clearly taking the key role in selecting the next CEO for his company. It's quite possible that he could decide that only he can bring this company to its full potential. He's watched his friend Steve Jobs do that and he might decide that now is the time for him.

Wall Street would likely love that choice. We'll see

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