We are in a moment when value doesn't play a role in the market. All we care about is heading for the exits, or owning Facebook (FB), Twitter (TWTR), Tesla (TSLA), Circuit City and some pot stocks.
Think about it. Everything else has been totally problematic. Sure, we can focus on Microsoft (MSFT) and the new CEO, Satya Nadella. We can call the stock cheap. We know there is a ton of value to be unlocked. But why would an insider unlock it? We know the last quarter was good. We would love to see the company spin off entertainment, as the Xbox is red hot.
But what do we really want? We want social, we want mobile -- and not Nokia (NOK) mobile, like what Microsoft has. We want search, which Microsoft used to have a chance to own. Who likes the stock of Microsoft here? Guys like me, because I can see the value.
But Microsoft is almost nostalgic in the face of the growth companies that people love right now, the ones that involve social and mobile in a dazzling way. Microsoft doesn't dazzle. I don't know if it can even do that anymore. Just to talk about it and talk about it excessively is to brand yourself old-school in a world where all that matters is new-school. Microsoft has been left behind.
Fortunately Microsoft has enough money to buy companies. But it isn't going to buy what it should buy, because that will hurt the short-term numbers. That is the state to which Microsoft has devolved. It didn't buy Twitter, for instance. It could put together a vertical of Yelp (YELP), Zillow (Z), LinkedIn (LNKD) and Pandora (P) and really become something social and mobile on the web. It could go buy Netflix (NFLX) and own the entertainment world when combined with Xbox. $30 billion would probably get Netflix, which is not too much if you want to get right with where the world's going.
Microsoft could go purchase Workday (WDAY), Concur Technologies (CNQR) and ServiceNow (NOW), again, in order to own the cloud and enterprise. But these are bold things to do. It could buy Stratysys (SSYS) and own 3-D printing. Or it could buy Box, the office version of DropBox. For heaven's sake, maybe it should just look at who showed up at the last DreamForce, the Salesforce.com (CRM) cloud festival, and just buy some of those companies.
I know this sounds like a laundry list of what Microsoft can do. But it must do these, because even though Windows is a dominant player now, it might not be dominant in the future. I remember when IBM (IBM) was dominant. I remember when BlackBerry (BRBY) was dominant. People forget how quickly dominance can go away. Microsoft could go away, too, unless it uses that cash to become more relevant.
Now, I am not saying that Microsoft should go chase every cockamamie theme out there. That doesn't make sense. But if you want to be in the tech space and matter, then you have to do some buying. You can't do any developing at this point. For Microsoft, it's way too late for that to happen.
