Microsoft stock leaps on news of iPad Office
Investors show approval of strategy change; shares reach dotcom boom-era levels
Microsoft shares soared yesterday, following a Reuters report that the Redmond-based software house was about to unveil an iPad-compatible version of Office.
Stock rose 5% to $39.90 in Tuesday trading following the report late on Monday that Satya Nadella was likely to announce the app during his first major press release as chief executive on 27 March. Reuters likened the share price to levels seen in the dotcom boom era.
The decision to move away from a Windows-only approach to the release of its software is one investors have been urging Microsoft to make since demand for mobile devices started eating into global PC shipment volumes. Since the iPad alone has sold around 150m units, analysts project billions of dollars of potential revenue from an iOS version of Microsoft's flagship productivity suite.
"We estimate that if 10% of the iPad install base were to subscribe to Office then this could add 15m subscribers and generate $1.1bn to $1.5bn in consumer Office subscription revenue per year," Bernstein Research analyst Mark Moerdler said in a note yesterday.