Activist investment firm ValueAct Capital has held talks with members of Microsoft’s board about its desire to pursue a board seat, pressing the company over issues including the apparent lack of a succession plan for Microsoft CEO Steve Ballmer, according to a report by Reuters this afternoon, citing two anonymous sources.
Reuters reports that the investment firm has been contacted in recent months by institutional investors “expressing concern over management execution and strategy” at Microsoft.
Microsoft isn’t commenting on the report. The news follows a big earnings miss by the company yesterday, along with the announcement that Microsoft was taking a $900 million charge over “inventory adjustments” for its Surface RT tablet, following widespread price-cutting after the company’s iPad rival didn’t live up to its early expectations.
Microsoft shares closed down 11 percent today at $31.40.
The investment firm earlier this year said it had taken a $2 billion stake in the company, and it has previously been reported to be interested in a seat on the Microsoft board. Rick Sherlund, a longtime analyst now with Nomura Research, reiterated this week that he expects ValueAct to make its move as early as next month.
The recently announced reorg at Microsoft didn’t create a clear successor to Ballmer, who has indicated in the past that he wouldn’t retire until 2017 or 2018.