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Microsoft Considers $10 Billion Dividend
Dreadnougat writes "Microsoft is considering paying out a $10 billion dividend, the largest corporate payout ever. Cynics (ok, anyone reading /.) might note that Bill Gates stands to make $1.18 billion himself off the $1 a share dividend, in comparison to the $95 million he makes in a normal year off the regular 8 cents a share dividend."
If only I'd bought that Microsoft stock when I was born.
MS is paying money to it's loyal investors because Bill Gates is greedy.
Had MS not payed out, the summary would have been:
MS is not paying out money to it's loyal investors because Bill Gates is greedy.
Come on, people - I _highly doubt_ Bill really cares whether he makes a hundred million or a billion dollars. If anything, it'd probably be more of a hastle for him, with all the extra taxes. Besides, is he even the guy that makes this decision anymore? He's not CEO. Perhaps an accountain could help me out on this one?
--
http://nemilar.net - Not your grandmother's soup kitchen
They are about to buy off the whole damn country.
This will make Bush's meager tax money payoff seem
like peanuts to the microsoft stock owning public.
Well, I have to give them credit. If they can afford
to part with 10 billion, this is a great way to
purchase good will.
For every annoying gentoo user, are three even more annoying anti-gentoo crybabies. Take Yosh from #Gimp for example.
Why shouldn't Gates earn dividends on his shares? His dividend payment would be proportionate to the amount of shares he owns.
I guess certain people have to find any excuse to attack the man.
-- You see, there would be these conclusions that you could jump to
It'd be nice to see dividends once again be the main way most people expect to make money with stocks. Especially tech stocks. Focusing on the worth and stability of a company is a good thing. IMO, building money over time through dividends is more practical (read: safer) for small time investors than speculation.
Now that there is no dividend tax and Microsoft is no longer a growth company, there isn't any good reason not to pay the stockholders. When there was a dividend tax, Microsoft could argue that by keeping the money, they could put it to more efficient use to build stockholder value in terms of share value, rather then giving some of it to the stockholder, and some of it for the gov't. The other point is, that Microsoft is done growing by leaps and bounds. They don't need any more capital to grow, or smooth out cashflow issues, or any other standard business reason why a company normally keeps money cash on hand.
I believe the shareholders are starting to demand it, as that's the one way the shareholders can get their money out, without having the price go up or down. It's a sign that Microsoft is turning into an old school established company, like so many others, rather then being a hot commodity stock that creates value, because the company keeps growing, and building up more value.
Kirby
Had MS not paid out a dividend they would have retained (allowing for various tax differences in what they do with the money) this much more as free cash (i.e., capital), hence the firm would increase in value via an increase in the share price.
To realise this gain in cash, investors would just sell shares. Or even, to maintain parity, MS would issue shares to existing shareholders pro rata who could then sell them if they wished.
The fact there is a dividend or not matters little unless we go into the intricies of corporate finance theory.
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FreeNET user? Comfortable with the adverse selection?
Bill's waited antil after the anti-trust case, but since he's ignoring it anyway, he's not likely to give a shit.
Good move, Bill - you are now, officially, a Robber Baron
oh brave new world, that has such people in it!
I'd say the factors behind this are:
1) M$ had an inordinate amount of money stashed away, pushing the limits of accounting rules for contingencies, earmarks for future projects, etc., but with being threatened with breakup it's hard to argue with what all contingencies they may have needed to consider.
2) With settlement of the suit, that excuse went away. They have to pay out a dividend because the IRS says so.
3) They held out (wink, wink IRS) until the Republicans reduced the dividend tax.
4) Billg is probably just as glad about it anyway so he doesn't have to sell more stock for whatever reason he was selling it, presumably partially at least to fund his charities.
rd
Dunno about the others, but I doubt Microsoft can afford to buy IBM. IBM reported $20.1 billion in revenue for the first quarter. That puts it at more than $80 billion in revenue for the calendar year.
By comparison, Microsoft's revenue for the quarter was $7.1 billion.
-- Slashdot: When Public Access TV Says "No"
I'd say it would be spent by shareholders in a more direct way than the money is being used by being invested in liquid investments by M$, but even in liquid investments the money was funding short term loans of some type.
On the other hand, maybe 40% go to Gates, Ballmer, Allen and a few other billionaires. In at least Gates case, he has been tending to donate his money overseas, so the full $10 bn definitely won't be spent here. A lot of his non-health donations I think tend to get spent back on M$ products and PC's, so some of his donations will end up back at M$.
Also read today that over half of us non-billionares are saying in polls that they're spending tax refunds on paying bills, which isn't the new purchases that Republicans were looking for. On the other hand, in my opinion, paying bills frees up the credit limit to buy more anyway. Six of one, half a dozen of another..
rd
This may make the stock rise - too much cash on hand is often seen as a negative by analysts.
Did you miss the fact that MS was found guilty of illegally leveraging their monopoly by a Federal Judge?
/.?
Those profits were gained via illegal activities.
Why am I having to explain this to anyone reading
I thought the real point behind having ownership in a company was getting a slice of the company's profits. Then the buying and selling of shares is based on the expectations of distributions. But double taxation of such distributions discourage companies from distributing profits, instead using those profits to fuel growth. At that point, the share price can no longer ride on the future expectation of distributions. It can only ride on the expectation that someone else will buy the stock from you for more than you paid for it. And then it seems that everyone only values how much the company grows, not how much the company is profitable. We know from recent history that this is a bad thing.
> No, he did not play by the rules. He broke the law -- the courts have so ruled.
Umm. So the legal system have the final say in what is right and wrong?
Yet every week there are people here shouting how wrong and unfair DMCA/outragous legal settlements/patent cases are.
So;
We agree with legal rulings = The legal system is clearly the last word in what is right.
We don't like legal rulings = The legal system is corrupt and change is needed now!
The surprise isn't how often we make bad choices; the surprise is how seldom they defeat us.
I think we can rule out Microsoft being "debt-laden", but it still sheds an interesting light on how finanicial people with a tech background will be looking at this move: The growth days are over, and from here on, it is stagnation.
(Disclaimer: Everything I ever needed to know I learned from Slashdot)
Geez, go read the Mythical Man Month, okay? More programmers is the _last_ thing Windows needs.
The economy is being blown out. The value of everything is dropping vis a vis what the current manipulated artificial currencies say they are worth. Sitting on daily de-valuing cash is pointless, they are taking the cash and running with it NOW before it's worth much less, that cash can be converted to more wealth-preserving assets. In a month or three, perhaps that same valuation in forms of digits would be worth much less when it's compared to tangibles. This is what the real high rollers around the planet are doing, so it's not surprising that microsoft management would be doing it. that their smaller shareholders get a piece of it they can't avoid, that's out of their hands, but the larger holders want OUT, they want to get into safer things now. This is a serious economic clue, of much more worth than most nightly business reports puffery.
NOt exactly the same thing: the lower the income, the more that 1% matters. To bring this into perspective, think of a farmer in Asia, that gets about 1000 $US a year. For him, parting with 10 $US is a very big deal. On the other hand, Bill Gates could part with half of his money, and still have left 25 billion that he wouuld have no idea what the fuck to do with.
Sigged!
The Rumors of Microsofts death is GREATLY exagerrated.
.net and it's VERY cool. Generic hardware and a generic OS leads to managed code run-times like .net and Java. The .net effort is really a safety gap in case the world DOES fall in and the Windows hegemony is busted by open source.
No other company is in better control of it's own potential destiny than Microsoft. The declining stock price is due to the down performance of the market as a whole.
True, Linux is a serious thorn in Microsofts side. It means that they CANNOT charge whatever they like anymore. It means the outrageous price of Microsoft software will stay constant or start to decline. Microsoft's core products are serious cash cows and there are no signs that their core users, business and personal desktops, will be wrenched from their hands anytime soon.
On the applications side, Microsoft still has SERIOUS leads in the scope and usability of their software. In the enterprise area, (documents & email) Microsoft software is a user's dream compared to the nightmarish offerings from IBM. True, Microsoft doesn't scale as well, but they continuously make significant inroads.
Linux & IBM still has a lot of work to make their enterprise applications supplant all the functionalities available from Microsoft.
Even in a commoditized market, don't count Microsoft out. They clawed their way to dominance through cut-throat business practices and frankly CRAPPY software. Their recent work has mostly been excellent. Their developer tools are the Roles-Royce's of the computer world. No other company bends so far backwards to enable their developer community.
As far as Mac is concerned, they hold strong in the niche market of Graphics, Publishing & Film. They hold a 3% market-share of new PCs. There machines are now VERY excellent with a unix-based OS but they are still somewhat pricey. I can see them making significant inroads into scientific computing. However, don't expect the world to beat down Apple's doors because they have a Unix-OS and a VERY pretty user shell. I expect Apple to pick up market share now, but I never expect that they will make a significant dent into either Windows or Linux.
On the off-chance that the OS becomes COMPLETELY commoditized, MS DOES have a plan. It's called
-------- -------- Support Wesley Clark for president!!!
MS is making a lot of people wealthy. Name one single OSS company that has made any ordinary investors wealthy? RHAT? LNUX? hmmm... These two companies used hype to jack up their stock prices, the people with the options made out like bandits, and all of those poor saps who believed in the company have lost their retirement. On the other hand MS's stock has been steadily increasing in value pretty much since day 1, no matter what happened with the economy, and now they're paying their investors a large sum of cash. Hmmm... boy, who's the bad guy here, I wonder?
Moron.