It looks like we had significant dark pool selling in Microsoft stock in after hours trading on August 12, 2019.
Reliance Jio Infocomm and Microsoft announced a long-term strategic relationship aimed at accelerating the digital transformation of the Indian economy and society. Jio will set up datacenters in locations across India, consisting of next-generation compute, storage and networking capabilities, and Microsoft will deploy its Azure platform in these datacenters to support Jio’s offerings. The initial two datacenters, which can house IT equipment consuming up to 7.5 MW of power, are being set up in the states of Gujarat and Maharashtra. These are targeted to be fully operational in calendar year 2020. Jio will leverage the Microsoft Azure cloud platform to develop innovative cloud solutions focused on the needs of Indian businesses.
My guess is that an institutional investor doesn’t like the idea of Microsoft spending billions of dollars of investors money expanding IT infrastructure across India in an attempt to digitally transform the Indian economy. That sounds like a huge money pit. It sort of reminds me of the story of tooth-paste.
The first people to invent toothpaste died broke because before toothpaste sales could take off, first the public had to be educated on why they actually needed toothpaste and even then, there was lots of skeptics for many, many years. Bringing in something new is usually like that. Trying to modernize the entire Indian economy might be something better off left to the government of India instead of Microsoft and its investors.
It does beg the question of why yet another Democrat leaning tech company like Microsoft isn’t closing down its Indian call centers and bringing those jobs back to the U.S. It’s not just Microsoft. Any customer service you need from Google, Paypal, Amazon, all are routed to people with horrible english accents in India. These Indians work for $3 – $5 per hour while people in the U.S. want $15 per hour with raises each year.
The options order flow was highly biased towards PUTs today which reinforces the thesis that today’s dark pool orders were sells.
The other news that could be driving an institutional investor to sell Microsoft stock in after hours trading today is that Google (GOOG), Apple (AAPL), Microsoft (MSFT), and other technology companies have failed to respond with action to pleas from the NTSB from 2016 to add information on the United States’ hundreds of thousands of railroad crossings to their navigation apps. The inaction by the tech giants remains a frustration for safety advocates at a time when hundreds of people die each year in crashes at railroad crossings in the U.S., even as drivers increasingly use their smartphones’ GPS apps to tell them where to drive. The companies’ ignoring of the calls for change is could be tantamount to gross negligence and open up the companies to huge class-action lawsuits. At the very least, because these tech companies went all in with supporting Democrats, it’s likely that the Trump Administration will push for huge government fines against these companies for gross negligence. With Microsoft stock hitting all-time highs, an large institutional investor could figure now is a good time to book some great profits.