Who is Company A? (We’ll get to the red dot later.)

 Company A Stock Price

Company A. Stock price data from Yahoo Finance.

Company A is Blackberry. The chart shows its stock price for the eight years through the end of September 2013. It’s not the whole history of the company. Even though its stock price at the end of the chart is down from the beginning of the chart, it’s still more than triple its initial price.

Who is Company B?

 Company B Stock Price

Company B. Stock price data from Yahoo Finance.

Company B’s chart also shows an eight-year span, though it’s a different eight years. The eight-year spans overlap by two years.

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This essay is not really about Microsoft. I don’t know what Microsoft should do. Neither do you, reader. You think you know more about Microsoft than Steve Ballmer? Bill Gates? The Microsoft engineer living next door? Maybe. Probably not.

Important people commented on the imminent departure of Microsoft CEO Ballmer in USA Today’s Opinionline section. More than the substance of those opinions, which are hardly backed by unequivocal evidence, it is interesting to look at who said what.

The tech community is torn between Microsoft friends and Microsoft enemies-for-life (typically Linux fanatics). Tech Crunch writer Alex Wilhelm sees Ballmer as a good CEO who is exiting at his best. ZDNet writer Steven J. Vaughan-Nichols, a staunch Linux worshiper, has criticized Microsoft for years and naturally regards Ballmer as a flop. Both make cases based on technol­ogy, personal preferences, and anecdotal evidence. Of course none of those are the perspective that matters.

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A recent story in USA Today: “Apple becomes a hedge fund target.” It seems that George Soros doubled his stake in Apple to 66,800 shares. Carl Icahn revealed earlier with a tweet that he is building up a big position as well.

Soros and Icahn are just the latest in the wave of large hedge funds and their billionaire founders buying stock in public companies. What’s news is that they are no longer confining their moves to smaller companies. According to USA Today, “The percentage of companies that activists are targeting valued at more than $1 billion is 29%. If that pace holds it would be a 45% jump from 2012, FactSet data show.”

At this point you may be reading to satisfy your curiosity about the big egos and big bucks involved. Ackerman and Soros bought into JC Penney, and now Ackerman has left the board. Soros is facing Ackerman on Herbalife, where Soros went long and Ackerman went short. Fascinating; boys and their toys. But if you stop to reflect for a minute, you may realize this is much more significant than rich folks playing. In fact, I claim, we are entering the Third Revolution in the history of public companies, thanks to the much-maligned hedge funds. A much-needed revolution, too.

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A venerable company is in trouble. The world is changing, competitors are changing, the com­pany is not. A rescue is required.

A star is brought in as the new CEO. Of course the star wants to make changes. So does the Board; making changes is the whole point of bringing in the star. The star has achieved huge success previously (that’s what made the star a star). So what should the star do?

On leadership:

A) Stake out a bold, new, inspirational path.

B) Stick to tradition.

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