Microsoft To Pay First Ever Dividend

[SteveC]

Microsoft, sitting on US$43.4 billion in cash, will start giving some of it back to stock holders on March 9. They also announced a stock split to take place on January 27. Even with the dividend, analysts still expects its cash pile to grow:

At current levels, Di Bona said that he expected the estimated $870.6 million in annual dividend payouts to slow the increase of Microsoft's cash hoard but not reduce it.

The full story can be found at Reuters.

 

[cas]

I bought some Microsoft stock a few years ago, when it was worth a bit more than it is now. With the dividend, I can’t decide whether I want to let it accrue to reduce my cost basis to break even, or go to the movies; by myself.

 

[Vlad The Impaler]

Another take on this:

http://212.100.234.54/content/7/28914.html

 

[Cliptin]

I bought some Microsoft stock a few years ago, when it was worth a bit more than it is now. With the dividend, I can’t decide whether I want to let it accrue to reduce my cost basis to break even, or go to the movies; by myself.

Should have bought more stock!

 

[CityK]

I bought some Microsoft stock a few years ago, when it was worth a bit more than it is now. With the dividend, I can’t decide whether I want to let it accrue to reduce my cost basis to break even, or go to the movies; by myself.

behavioural economics at its best....the movie!!

 

[Clocker]

Historically, growth companies do not pay dividends whereas mature companies do. I take this as an indicator that MSFT is entering a stage where growth will slow (maybe significantly). I don't see that as a big suprise, either....

I would expect growth in share price to slow over the coming years while dividends slowly but steadily increase.

C

 

[CityK]

Historically, growth companies do not pay dividends whereas mature companies do. I take this as an indicator that MSFT is entering a stage where growth will slow (maybe significantly). I don't see that as a big suprise, either....

Exactly, growth companies want capital to, err.., grow. MS has entered another stage...the slow road to obscurity.

The stock split is kind of funny though...$52 has nothing on Berkshire.

 

[honold]

Exactly, growth companies want capital to, err.., grow. MS has entered another stage...the slow road to obscurity.

obscurity...right...

The stock split is kind of funny though...$52 has nothing on Berkshire.

how is you observation on this any different from any other stock split ever?

 

[CityK]

1) Is MS likely to be in the primary capital markets anytime soon? I would tend to think that their $41B warchest rules out that likelihood. So the stock split was not initiated to help facilitate future captial needs.

2) Are they worried about their stakeholders having liquidity issues with such a "highly" priced stock? Well, their last split (Mar 29 '99, a 2-1) brought the stock's lofty price back to the ~$90 mark. At that time, and for a year afterwards, share price was climbing. Flash forward to today and we see that MS has been trading roughly in a $80-40 band since Q2 '00 (ie. the stock, like so many others, has generally been moving sideways), yet volume has not been affected adversely. Liquidity arguement fails....(interestingly enough, some academic studies indicate that stock splits tend to reduce liquidity because of the associated higher brokerage fees on the lowerly priced stock)

3) I don't think I was the only one suspicious of this move: http://biz.yahoo.com/tsp/030117/10063492_1.html

Cheers, CK

 

[Stereodude]

Another take on this:

http://212.100.234.54/content/7/28914.html

I can't get the webpage to load because of my tinfoil beanie hat. What's it say?

Stereodude