Microsoft Replaces $40 Billion Share Buyback Program, Offers Dividend Increase
September 17, 2013 11:26 AM
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Microsoft is upping the quarterly dividend from $0.23 to $0.28
Microsoft is investing its cash into its own stock through a new share buyback program, and has also announced a dividend increase.
Microsoft introduced a new $40 billion buyback program, which is replacing the previous program that expires September 2013. While the previous and new buyback programs are both set at $40 billion, the new one doesn't have an expiration date.
This looks great for Microsoft because it shows that it wants to invest its own cash into its own stock.
In addition to the buyback program, Microsoft is upping the quarterly dividend from $0.23 to $0.28, which is a 22 percent increase over that of the previous quarter. According to Microsoft, the dividend is payable December 12, 2013 to shareholders "of record" on November 21, 2013.
“These actions reflect a continued commitment to returning cash to our shareholders,” said Amy Hood, chief financial officer of Microsoft.
Microsoft has been particularly busy this year trying to turn things around after a failed Surface launch, a lack of enthusiasm for Windows Phone and complaints about Windows 8. The company is currently undergoing a restructuring process, where CEO Steve Ballmer will be out within the next year and devices like Windows Phone, PC and Xbox One will become more unified for a more fluid user experience.
Microsoft is attempting to stay competitive with new efforts like
buying Nokia's devices and services unit
for $7.2 billion and holding a
new Surface 2.0 event September 23
-- which will hopefully muster up more enthusiasm than the previous generation.
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RE: Hardly laudable
9/17/2013 7:30:08 PM
I'm not sure how buying back stock relates to a company stops innovation or unable to compete. When company generates cash, they need to find ways to invest instead of letting the cash sit idle. And buying stocks is one type of investment, whether buy one's own stock or others.
Spending more money on R&D and/or acquiring other companies doesn't 'necessary' guarantee new prodcuts or innovations. For example, would you buy something that is inferior to what you have?
*I'm not saying MS have superior products, it is only an example*
RE: Hardly laudable
9/17/2013 8:40:03 PM
Looks to me like M$ is trying to prop up the stock prices, so select (*cough*Ballmer*cough cough*) can sell his shares, and retire rich.
RE: Hardly laudable
9/17/2013 10:15:04 PM
Ballmer is already a multi-billionaire. I don't think he needs to do this to fund his retirement.
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