Stock's ups and downs tell Microsoft's tale for 2013

A visual look at Microsoft's share performance illustrates the year's big events.

A year of ups and downs

Microsoft had quite a 2013. Its stock rose and fell, sometimes drastically, based on PC sales, giant write-offs and CEO Steve Ballmer's retirement announcement, among other things. Here are some of the highlights from year.

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Revenue boom

On April 18, Microsoft announced its first-quarter earnings, boasting that total revenue had increased 18% year-over-year, and that even in the face of struggling PC sales it had managed to keep Windows revenue even with the year prior.

Just days before, researcher IDC had estimated that PC shipments had plummeted by 14%, one of many dismal forecasts the industry saw in 2013. Microsoft said it handled the downturn in shipments by selling more volume licenses to enterprises, including those trying to get out from under Windows XP before its 2014 support drop-dead date.

The positive earnings report preceded a 12-day climb in Microsoft's share price that pushed the stock up almost 17%, shown by the growing peak to the right of the red line.

Surface goes bust

At Microsoft's July 18 earnings report, the company dropped a financial bomb: It wrote off $900 million because it couldn't unload the nine-month old Surface RT tablet without drastically knocking down the price.

The cliff immediately to the right of the red line represented q one-day drop in share price of more than 11% as investors reacted to the bad news.

The write-off, although not Microsoft's biggest, showed that the Surface line -- a linchpin of the "devices" part of its new "services and devices" strategy -- had failed to gain traction among consumers or businesses, and put even more heat on CEO Steve Ballmer.

Ballmer calls it quits

Early on Friday, Aug. 22, Microsoft announced that CEO Steve Ballmer would retire within the next 12 months.

Wall Street responded by pushing up the company's share price by 10%, confirming speculation that financial analysts thought Microsoft would be better off without the company veteran than with him. 

Microsoft shares shed the "Bye-bye Ballmer" bump within two weeks, but many analysts credited the CEO's plans to step aside for the sustained increase in the share price seen in the following months.

Take two for Windows 8.1

On Oct. 17, Microsoft began serving up Windows 8.1, a refresh of its original Windows 8, to customers (shown by the red line). A week later, it began selling the second-generation Surface 2 and Surface Pro 2 tablets, revisions that touted faster processors, upgraded cameras and improved kickstands. 

The two events -- Windows 8.1's arrival and the on-sale launch of the renewed Surface tablets -- came during a stretch when Microsoft's share price was gradually climbing out of the hole first dug after the $900 million write-off, then by the after-effects of Ballmer's retirement announcement.

Mulally out of the running?

After hitting a 13-year high on Dec. 4, shares stumbled the next day, dropping more than 2% when Bloomberg reported that Ford Motor Co. board member Edsel Ford II said CEO Alan Mulally would stay at the car company. 

Mulally had been thought of as a possible successor to Steve Ballmer. Many believed Mulally's business and organizational acumen, a reputation he earned during the turnaround he engineered at Ford, was just what Microsoft needed to transform itself. 

The stock slip was a likely portent of Wall Street's reaction if Mulally is not selected as Microsoft's next CEO. Some analysts believe that the firm's stock will take a beating because investors will dismiss any alternate candidate as insufficiently daring or simply a swap for a Ballmer act-alike.

Copyright © 2014 IDG Communications, Inc.