Slashdot Mirror
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."
This is the main way of funnelling profits from your company account to your personal account in Railroad Tycoon.
Bite the hand.
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
1) Buy SCO and read their evil plans before making them all walk the plank.
2) Put it all in a massive pool and swim in it.
3) Buy out every cell phone company in your state and turn them off *just to stop the stupid ringtones*.
4) Spend the rest on pr0n.
Beep beep.
Guess that's the short end of the stick, huh.
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.
secure the damn OS.
Thanks.
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
There was an interview with Scott McNealy in one of the Linux magazines a few months back. In it, he said (paraphrasing) "if Sun ever pays out a sizeable dividend, it means we've run out of R&D ideas and the company's in trouble". I don't remember the exact wording, but that's the gist of it.
Essentially, Sun's policy is to reinvest all profits back into the company. Putting it another way, they're banking on being able to keep growing the company indefinitely and thus keeping shareholders happy solely through upward movement in the share price.
It seems that this may have been Microsoft's policy as well until now. Conspiracy theories aside, it'd be interesting to know what changed to make them issue a big dividend after all these years.
No, dividends are taxed at the (now reduced) capital gains rate, instead of the ordinary income rate.
Now I have to go find my Railroad Tycoon CD. Now thanks to you, my three-day weekend has just became drastically shorter.
There's exactly two legitimate bases for stock valuations: one is dividends, the other is a cycle of systematic buy-backs and new issues.
Absent either of those two options, what have you got? You've got someone saying to the market "Hey, loan us some money. We never intend to repay, but perhaps you can sell our note to someone else for a profit."
And consider this: a lot of companies, institutions, foundations, trusts, etc. regularly buy securities for endowments and other investment purposes. Now, if Microsoft stock is a good performer, it would give Microsoft an "in" with those companies and institutions for software sales.
No matter what you think of Microsoft (and for the record, I do not have a single Microsoft product under my roof) this is a smart business move. And I might add that Linux cannot compete on these grounds, either. Smart move... seriously.
IAAL
Where'd that "$1 per share" stuff come from? All the reports I've seen today speculate about an increase from 8 to 26 cents per share, max.
But then, Slashdot could only troll about Gates taking 2 billion, not 10 billion. I'm sure it was just an editorial typo. Heh.
-- Slashdot: When Public Access TV Says "No"
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"
Microsoft is made up of a load of long-timers who have made enough money through stock options that they don't really have to work and the newcomers whose stock options have been underwater for several years.
Without stock options (and the money generated with a rising stock price) neither the money or the work environment is much to write home about. Neither the old-timers or newcomers are particularly motivated and most of the "innovation" goes on by buying smaller companies.
Issuing a dividend is one way to pump the stock price up and thus motivate some employees.
Yea yea, I'll probably be modded flamebait or troll but... come on! ANYTHING MS does is immediately evil? Look, for the first time ever last quarter they paid out 8 cents a share dividend, because it made financial sense. This time they have looked and, again, it made good solid financial sense to pay a dividend. It's good for the stockholders, it's good for the economy and, yea, it's good for Gates and other execs (because they believe enough in their company that they own shares in it too). How is it even remotely possible in any way, shape or form that MS giving it's shareholders money is anything but good for everyone? Indirectly, even non-stockholders benefit (think about it).
With Windows you can get Money.
With Linux you can get Enlightenment.
Really.
This may make the stock rise - too much cash on hand is often seen as a negative by analysts.
So I'm going to get $1 for the one share of MSFT I own! Wow, now I only lost $24.34 to MSFT!!!
hmm... for fun I enjoy launching DDoS attacks against 127.87.42.5
Or 50k Indian programmers 20k a year.
Give it up man, the golden age is over.
Democrats or Republicans. They are both taking us to the same place and they are not afraid of us anymore.
> 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)
Over 600 million each donated to child health, and HIV/AIDS/TB. As staggering as the absolute magnitude of those numbers are, even in percentage terms they are quite remarkable. Given his total career earnings of, say, $50 billion or so (to date), this represents more than 1% to each of those causes.
To put it in perspective, do you know any other moderately well off computer geek, who may make $3 million in their career, pledging 1% ($30,000) to each of those causes? He's also indicated that global HIV/AIDS/health is a top priority, so expect him to give a lot more in that area before he's done.
Slashdot is entertaining like pro wrestling is entertaining
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!