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Microsoft CEO Satya Nadella Offloads Shares, Nets $8.3 M

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As per some media reports, Satya Nadella, the CEO of Microsoft Corporation (MSFT - Free Report) has reportedly offloaded 143,000 shares of the company on Aug 11 at an average price of $57.97 per share, netting $8.3 million. As of today, he owns 1.18 million shares of Microsoft, which is around 0.02% of the company’s total market cap.

We also note that, Amy Hood, the Executive Vice President and CFO of Microsoft sold 120,000 shares of Microsoft on Aug 8, 2016 at an average price of $57.86, netting a total of $6.94 million. As of today, she owns over $30 million worth of the company.

Satya Nadella as Microsoft CEO

A long time Microsoftie, Satya Nadella took over as the CEO of Microsoft in Feb 2014 succeeding Steve Ballmer as the former CEO. At that time, the company was going through a lot of rough waters with Windows 8 proving to be a disaster, Bing losing out to Google in search dominance and it also fell short on the mobile segment with iPhone and Android based handsets ruling the roost.

Under Nadella’s vision Microsoft has witnessed many improvements on various fronts. The following are some of the notable ones:

Windows 10 as a Service: With Windows 10, Nadella has brought a number of changes that include continuum (seamless experience across devices), Cortana integration (for personal assistance) and Bing integration (with the potential to increase its search market share). Moreover, the OS is being offered as-a-service, which will reduce piracy and lead to sustainable and recurring revenue.

Cloud Computing: Microsoft has made commendable progress in the cloud computing space as the company is second only to Amazon’s AWS in the cloud infrastructure as a service (IaaS) space. He has a set a revenue target for annualized commercial cloud revenue of $20 billion by 2018 and looks all set to get there.

Nokia Divestment: Nadella wrote down the Nokia handset business, retrenching most of the employees.

Moreover, recently he oversaw the sale of the feature phone business to Foxconn for $350 million.

Efforts to grow the Surface tablet business continue, enabling the company to tap the BYOD potential.

Apps Compatibility: Nadella has paved the way to make more and more Android and iOS apps compatible with Windows to retain its relevancy in today’s fiercely competitive market.

Internet of Things (IoT): Moreover, he has helped Microsoft to enter the new ‘in’ thing called the Internet of Things (IoT) which is basically interconnectivity of devices for smarter communication and execution of tasks. This field alone is estimated to be worth $1.6 trillion.

Collaborations: Last but not least, under Nadella’s vision, Microsoft has partnered with some of its major competitors such as Oracle and Salesforce that is likely to prove beneficial for the company in the long run.

Our Take

Microsoft shares were trading at $36.35 on Feb 4, 2014 when Nadella took over and two and a half years later, he decided to sell a few for $57.97 each. The 59.47% appreciation of the stock represents some nice gains that he decided to lock in.

Zacks Rank

At present, Microsoft has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology space are Adobe Systems Inc. ADBE, Avid Technology, Inc. AVID, each sporting a Zacks Rank #1 (Strong Buy).

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