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Tuesday, May 30, 2006 - Page updated at 12:00 AM

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Sagging stock sends Ballmer to Wall Street to quell critics

Bloomberg News

Microsoft Chief Executive Steve Ballmer is heading to Wall Street to meet with analysts and investors in an effort to blunt criticism that he's ignoring shareholders.

Ballmer will spend tomorrow in New York and Thursday in Boston giving speeches and hosting small gatherings in an effort to convince shareholders that his new spending plan will help bolster the stock's price.

"He's not spending enough time listening to people in the capital markets," said Michael Holland, who oversees $4 billion as chairman of Holland & Co. "What I want to hear is how much he listens. I want to see how well he does not being defensive and adversarial but being interested in hearing people."

Ballmer has never done anything like this in his six-year tenure as CEO, spokesman Tom Pilla said. Investors want him to respond to calls to boost the stock by using Microsoft's $34.8 billion cash hoard to buy back shares.

Microsoft shares are trading near their lowest in 3 years. The stock is the third-worst performer in the Dow Jones industrial average this year. The shares fell 2 cents to $23.72 Friday, before the Memorial Day holiday.

The slump prompted at least four significant shareholders to demand buybacks of as much as $100 billion.

Ballmer, 50, is also under fire for a decision to increase spending on new products and acquisitions next fiscal year. Shareholders have recently complained to his deputies about both.

Ballmer today will address a Sanford C. Bernstein & Co. conference and meet software analyst Charles Di Bona. He also plans to talk with UBS' Heather Bellini and Goldman Sachs' Rick Sherlund, and will speak at a Goldman luncheon.

Those are the three top-rated software analysts by Institutional Investor magazine.

"I want to ask him about the company's capital structure," Bellini said. "Will they take on debt and raise the buyback, and if not, why not? I also want to know what kind of sustainable earnings growth they can drive from increased investment."

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