David Einhorn of Greenlight Capital has a knack for making news at the Ira Sohn Investment Conference.

Recall that he famously and correctly predicted the implosion of Lehman Brothers at the conference in 2008, which kicked his public profile to a whole new level. This year, he was at it again.

This time, he has decided to take on Microsoft CEO Steve Ballmer, who seems like he's been at the company forever. It's a Sacred Cow perception that may be working against him. It's fair to say that ever since Ballmer took over for Bill Gates, the company has had trouble generating any momentum outside of the Xbox.

So, how bad has it gotten?

It was news when Apple overtook the company in terms of market capitalization. But when IBM overtook the company, people seemed to really take note. IBM? No kidding? Einhorn was quoted by Reuters as saying, "[Ballmer's] continued presence is the biggest overhang on Microsoft's stock."

This is a bold call against an institution of a CEO, one who has many backers on Wall Street. Indeed, the stock rallied powerfully in the face of the negative news. But you get the feeling that Einhorn was giving voice to an issue that was destined to take root at some point. It will be interesting to see if other hedge fund managers decide to join the call.

Will the Skype deal prove to be Ballmer's Waterloo? One unknown here is how aggressively Einhorn is shorting the stock, and if so, at what price. In any case, the Microsoft board will likely end up with its hands full, though it's doubtful they'll turn on Ballmer.  

For more:   
- here's the Reuters article

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