MSFT to pay 10 bil div - trading up$1 in Europe

Discussion in 'Trading' started by Cdntrader, Jul 4, 2003.


    Microsoft Considers $10 Billion Shareholder Payout -FT Affiliate
    Thursday July 3, 8:53 pm ET

    SINGAPORE -(Dow Jones)- Microsoft Corp. (NasdaqNM:MSFT - News) is considering paying its shareholders a special dividend of more than $10 billion to reduce its $46 billion cash pile, the Financial Times reported on its Web site Friday, citing its sister paper, Les Echos.

    Shareholders would receive the dividend in a one payment of "significantly more than $10 billion" or spread over three or four quarters, according to a person close to the discussions, FT reported.

    Microsoft has come under pressure from shareholders to unlock its war chest as its shares have lagged and cash holdings have grown.

    The dividend, which would be the largest corporate payout ever, is one of a number options Microsoft is looking at, the FT's sister paper, Les Echos, has learned.

    The other options include a buyback, acquisitions and higher ordinary dividends. A decision is expected by the end of the year, the report said.
  2. isn't this negative news? If they pay out a dividend that means they have no place to put the cash- no place to invest it in new technology or new businesses, so they simply distribute it to shareholders. In my opinion the stock should be down and not up.

  3. Deflation is on software industry because of the hardware sector leaded by IBM and Sun which want to reduce it to worthless commodity. It is no good for job market either. In the future software engineers will be jobless like the electronician engineers sometimes ago. Software will be delivered online through these two giants mainly at term. That's at least the declared purpose of SUN's CEO a few years ago which envisioned that SEMA group firm and software companies will be erased. I don't think they could erase that sector completely but for sure due to IBM's power the software industry will suffer deeply. A great sign: for the first time in his career Steve Jobs is selling his shares of Microsoft. Bill Gates has begun to do so long before him. So it is not good for Microsoft but it is not good for many others - I speak for long term (10 years perhaps), short term people won't just see nothing as usual.

  4. This is MSFT's way of saying that they are no longer a "growth" company.
  5. omcate


    You mean Steve Ballmer ?

  6. Gates has been selling his shares for years and years. He has a set amount he sells every quarter. He uses the money to fund his foundations, diversification efforts, and "spending money".

    The way this software is delivered whether on a disk or the internet does not alter the fact that the code has to be written. Actually, using web downloads would save MSFT a ton of money.

    The value added part of the information age and computers is the software and not the hardware. The computers will end up being "free" before the software will. The software is way behind the hardware now because of the talent,skill, time etc it takes to write more and more sophisicated code. Pioint is that there is a lot of work to do in software just to catch up and someone has to do it.
  7. maybe it's because any benficial owner of a share of MSFT is about to receive an immediate return on his investment in the form of a cash gift? that might do it.

    the market has discounted Mr. Softee's "growth" potential for some time, it seems.

    i'm scanning the horizon for the Next Big Thing.
  8. the next big thing ain't MSFT or any other software company. Money will still be made in software, but the profit margins will shrink and it will never be "cool" like it used to be.
  9. Agree! Software engineers will still have their jobs but their pay will be more in line with engineers in other fields.
  10. CalTrader

    CalTrader Guest

    the high growth rates in the software business are over ..... companies will continue to consolidate. It still is a business where the margins are very good but the problem is that many of the core business and scientific areas that in the past did not have transparent software solutions now do ..... A better algorithm in key areas will still be worth some money but the growth we saw during the 1995 - 2000 period will probably not return.

    To prosper in the business you will need a noncommodity solution or enforcable intellectual property. Microsoft will be the dominant player along with other business consolidators: we will probably see more aquisitions driven by MS and other key players..... MS will have continuing challenges dealing with Linux but will probably keep the bulk of its larger connercial accounts.
    #10     Jul 5, 2003