There’s been a lot of buzz in the past few days about activist shareholder ValueAct’s apparent push for a seat on Microsoft’s board.
ValueAct Holdings, which disclosed earlier this year that it had purchased some $2 billion of Microsoft stock, has been talking with some Microsoft board members and large institutional shareholders about gaining a seat on Microsoft’s board, according to a Reuters report.
But with a less than 1 percent stake in the company, does ValueAct have the power to gain such a seat?
Veteran Microsoft analyst Rick Sherlund, of financial-services firm Nomura, thinks so. In a note to investors Sunday, he wrote:
We have expressed the view that ValueAct has likely asked for a seat on the Microsoft Board and was prepared to enter the proxy solicitation process in August if this request were denied. We think the chances of winning a board seat are high given the dissatisfaction with how Microsoft has failed to optimize shareholder value, and we suspect Microsoft figures it is better to work through the ValueAct agenda in private rather than in a public proxy solicitation process.
Key to ValueAct winning such a seat would be support from the large shareholders, Sherlund writes.
So who are some of the largest shareholders? Here are the top five:
- BlackRock owned 443 million Microsoft shares as of last Friday, representing 5.32 percent of the total shares outstanding.
- Bill Gates, Microsoft co-founder and board chairman, owned 398 million shares as of May, a 4.78 percent stake.
- Vanguard Group owned 354 million shares as of March, a 4.25 percent stake.
- State Street owned 335 million shares as of last Friday, a 4.03 percent stake.
- Steve Ballmer, Microsoft CEO, owned 333 million shares as of September, a 4 percent stake.
ValueAct is the 31st largest shareholder, with some 33 million shares as of March — a 0.4 percent stake.
Microsoft shares were trading at $32.01 early Monday afternoon, up 1.94 percent after plummeting 11.4 percent Friday.