Tech & Biz

Microsoft unveils $40bn buy-back

by Sanjay Jha | September 23, 2008 at 02:20 am

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Stock markets all over world are tumbling after the turmoil in American financial world. Investors have lost their money and company's valuation have dipped down drastically. so many companies are taking advantages of low prices of their stock and have started buy back. Software giant Microsoft have been sitting on a cash mountain of $23.7bn and has never been in debt in its 33-year history. so it has started buy back of its stock for $40 bn. The tune of Microsoft buy back will be the single biggest buy back in the history of stock market.

Microsoft has unveiled plans to spend $40bn (£22bn) buying back its shares from investors, the biggest single buy-back plan in history.
Analysts say the move is an attempt by the software giant to use its spare cash to prop up its share price which has fallen by almost 30% this year.
Hewlett-Packard and Nike have also announced major buy-back programmes.
The personal computer-maker will buy back $8bn of shares, while Nike's plan is worth $5bn.
'Attractive prices'
Microsoft said the buy-back plan showed its "confidence in the long-term growth of the company and our commitment to returning capital to our shareholders."
Industry watchers have said Microsoft will be hoping the plan will revive its share price which has declined this year, partly due to its failed $47.5bn (£26.3bn) bid to buy the internet portal Yahoo.
"I'm impressed," said Michael Holland of the deals. He oversees $4bn (£2.2bn) as chairman and founder of Holland & Co in New York.
"When companies have come in to buy their own stock subsequent to a financial crisis, they've bought at attractive prices and it's been a good use of liquidity," Mr Holland told Bloomberg News.