Microsoft Corp president Steve Ballmer may have effectively shaved about $24.1bn off of his company’s market cap – not to mention considerably lowering his own net worth – last Thursday after he told more than 60 technology journalists that technology stocks, including Microsoft’s shares, were overvalued. In late trading after the remark, Microsoft shares fell 5.1% on the day as investors jumped on what they perceived to be the negative comment.
Ballmer, speaking at a technology conference in Seattle, said technology stocks were overvalued compared with the stock market as a whole. There is such an overvaluation of technology stocks that it is absurd, Ballmer quipped. I would include our stock in that category. It is bad for the long-term worth of the economy. When asked what the value of Microsoft’s stock should be, Ballmer answered simply, Less. Within a couple of hours, Microsoft’s shares had lost $5.6875 and the Nasdaq closed down 108 points, or 3.8%.
