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Microsoft's $40 Billion On Hand

Posted by ryuzaki0 on from the now-thats-an-eye-opener dept.

eMilkshake writes "CNN/Money magazine report here that Microsoft has more liquid reserves than 'Ford, ExxonMobil and Wal-Mart have combined' and 'enough to buy the entire airline industry -- twice. Or all the gold in Fort Knox, four times over. It is enough to buy 23 space shuttles or every major professional baseball, basketball, football and hockey team in America.' This is thanks to (according to WinInfo Update) the fact that 'Microsoft handles its investments with an inhouse software application called--seriously--the Catastrophe Hedging Program 2.5.' I wonder what I would do with $40 billion?"

10 of 789 comments (clear)

  1. $40 billion? by argStyopa · · Score: 5, Insightful

    Everyone else has been funny, so I'll bite on the question:

    If I had $40 billion in CASH, an infallibility complex, and a slowly-dawning-realization that a) I'm not going to be able to take it with me and b) everyone doesn't love me as much as I think they do I'd sure use that money for something significant.

    I don't mean "feeding the poor" significant. They'll forget it tomorrow. I mean like building the first moon base, or a space elevator, mine the first asteroid or some such thing. Be the person that really sparked civilian development in space, and you will be remembered forever (besides doing a good turn for humanity in the really-long-view).

    My $0.02, so that leaves room for another 39,999,999,999.98 more good ideas.

    --
    -Styopa
    1. Re:$40 billion? by weave · · Score: 5, Insightful
      Agreed, but I gotta say, while feeding and curing poor children in third world countries is admirable, the end result will simply be that they will live long enough to reproduce and make more poor starving children.

      The only real cures are to overthrow the corrupt governments that keep these country's citizen's impoverished, and/or take mean steps to cut down the birth rate (like, here, we'll feed you and your family for as long as you allow us to put this norplant thing into your woman).

  2. Re:What to do with $40e9? by Reality+Master+101 · · Score: 5, Insightful

    Or feed all the hungry on this planet...

    And what do you do the next day once the money's gone? Oh my god! The hungry are still there!

    When you realize that the reason people are hungry is not lack of food, you will be Enlightened.

    The reason people are hungry is not unequal distribution of wealth, it's because of unequal distribution of capitalism and freedom. Lack of food and money is a symptom, not a root cause.

    --
    Sometimes it's best to just let stupid people be stupid.
  3. Re:It's about tax evasion... by krlynch · · Score: 4, Insightful

    I guess I don't see how not paying taxes you don't owe (your "legally avoiding taxes") is "screwing over the American public". The rules were set by representatives YOU (not MSFT) elected, and if you don't like the rules, lobby to get them changed ... but don't accuse the people and corporations who actually follow the rules of being tax cheats.

    Let me put this another way: Do YOU give the government more tax revenue than you are required to do by law? If not, you hardly have a right to complain about others doing exactly what you are doing....

  4. Re:It's about tax evasion... by jgerman · · Score: 5, Insightful

    representatives YOU (not MSFT) elected


    This is a joke right. It's gotta be. You can't possibly think for a second that you have more of a voice in government than Microsoft (any large corp actually).

    --
    I'm the big fish in the big pond bitch.
  5. Re:bankrupt the world by letxa2000 · · Score: 5, Insightful
    It'd only be a matter of time before the rest of the world was paying microsoft (in intrest alone not even counting actual products and services) and all the banks would go 'bankrupt' as MS drained them of their monies.

    You are either a 1) liberal that believes in a finite amount of money. 2) Never taken econ classes. The latter is forgivable, the former isn't. :)

    MS has to have their 40b deposited in banks. Those banks don't just pay interest for fun; they take that 40b and loan it to others (you, me, etc.) and we use that money to build houses, buy cars, and do other things that stimulate the economy and create more wealth. The banks take the interest we pay, take their cut, and pay interest to those that have deposited their money with the banks (MS, IBM, you and me, etc.).

    It's all a nice little system called capitalism and banks allow wealth to be PRODUCED, not confiscated by a single individual or company.

    Don't worry; MS really ought to pay dividends with that money, but they're not hurting you or me by doing it. In fact, they're making more money available that banks can loan us to buy cars and houses.

  6. Not in the stock market I play. . . by Bastian · · Score: 4, Insightful

    All companies have to pay out dividends eventually, otherwise the price of the share would be zero (since the price of the share is basically the net present value of the the stream of expected dividends).

    The value of a share of stock is whatever people will pay for it, same as everything else. There are a lot of factors going into that, but I think anyone who follows the stock market would agree that the prime determinant of a share price is far more random than the one you suggest. The amount someone will pay for stocks today is related to how likely they think it will be that the stock will be worth more tomorrow. (i.e., I'm paying $15 a share because I think I will be able to sell it for at least $16 a share sometime in the future.)

    It has little or nothing to do with dividends or anything else related to how much money the company has on hand, or even whether it's turning a profit. If it had much at all to do with those factors, there would be no way to explain the share prices that dot.coms were hitting during the last decade. I don't think it was exactly a big secret that most internet firms are considered fiscally fit if they succeed in having a net profit somewhere in the area of zero.

  7. Comment removed by account_deleted · · Score: 4, Insightful

    Comment removed based on user account deletion

  8. Re:bankrupt the world by Courageous · · Score: 4, Insightful

    MS has to have their 40b deposited in banks. Those banks don't just pay interest for fun; they take that 40b and loan it to others...

    You're more correct than you say. They actually loan out the money many times. The very act of MS depositing $40B in the bank probably actually creates (and I do mean creates, yes) an additional $160B over the original $40B.

    C//

  9. Re:Communism = no one ever starves by Tackhead · · Score: 5, Insightful
    > "Communism = no one ever starves"

    There are approximately 5 million dead of famine during Russian Civil War (1917-1922), plus 30-50 million dead (excluding WW2 casualties) in Stalin's Russia, and 30 million dead of famine in Mao's "Great Leap Forward" who might beg to differ with you.

    (Actually, Stalin's count may have "only" been another 5-10 million from famine. The other 40 million were executed in purges or worked to death in labor camps. So I suppose you were right - not as many people starved, per se, under Stalin.)

    I'll take my changes with Capitalism, if you don't mind.