Microsoft Corp shares took their biggest plunge in more than 4 years by dropping at an astounding 11%. The drop is the biggest since the recession and layoffs of 2009. An estimated US$34 billion was wiped off from Microsoft's market value, which exceed the loss felt by rival Yahoo Inc. The software company posted the depressing result due to the weak consumer demand for the company's latest system alongside poor sales results for its Surface tablet.
The poor results shocked traders who believed that the company's strength with customers would help the company ride out the downslide in PC sales. The dismal results provoked uncertainty regarding Microsoft CEO, Steve Ballmer's plan to reshape the company approache with devices and services.
"The recent reorganization does not fix the tablet or smartphone problem," Nomura analyst Rick Sherlund said in a note to clients on Friday. "The devices opportunity just received a $900 million hardware write-off for Surface RT and investors may not even like the idea of wading deeper into this territory."
"This (the results) was much more disruptive than investors have expected, with Microsoft missing its guidance in every division and guiding lower," wrote Sherlund. "Everything an activist investor could ask for."
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