Thursday, July 20, 2006

How is Microsoft investing their money?

Today, Microsoft announced earnings that were just ahead of analysts' expectations. Along with this news, they also announced a massive stock buy-back program (reports suggest they are planning on buying up to $40 billion worth of Microsoft stock).

The first move will be a $20 billion tender offer to be completed on August 17, 2006, with an additional $20 billion offer to be completed by 2011. (Two years ago, Microsoft announced a $30 billion stock buyback.)

The company announced that it has just completed this plan and continues to show confidence in their own ability to deliver for the future.

[The offer is a modified Dutch auction, in which Microsoft will pay no more than $24.75 and not less than $22.50 per share. The buyback will equal about 8.1% of all outstanding shares.]

Word of the earnings report--in conjunction with the big buyback--sent Microsoft's stock higher in after-hours trading. Shares changed hands recently at $24.17, up $1.32, or 5.8 percent, from the close of regular trading. (Microsoft closed at $22.85, a drop of 55 cents).

Would you invest in what you are doing today?


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