Microsoft after the bell 05-05-06: is it a growth or a value play?

After a very rough week, Microsoft investors caught a break today and saw their shares net a decent gain. The stock closed at $23.80 -- hey, it's almost $24 a share again -- a 36 cent, or 1.5 percent rise. The stock still has a lot of ground to make up to get back above $27, where it was trading on April 27, before its devastating earnings announcement.

Hot off the presses from this week's BusinessWeek: "Mixed Signals From Microsoft." It's a great explainer for why Microsoft shares dropped 11% after its quarterly results last week, (which really helped msft.bloggingstocks.com debut with a bang).

The article also explains why buyers may still be reluctant to step in. After Microsoft announced it would spend an extra $2 billion this fiscal year to grow its businesses, all the value investors who had been attracted to the shares in recent years bailed. But growth investors, who normally like to buy companies that spend heavily to invest in their own businesses, don't have enough details on Microsoft's strategy to get back in the game yet. BW writer Jay Greene concludes, "until the spending details are clear, the shares are likely to drift." 

Translation: Don't expect today's nice gain to translate into a major rally next week.