Microsoft Buys Back $40 Billion Shares

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Microsoft will return cash to stockholders in a recently announced $40 billion dollar share buyback. The technology company increased its dividend by 22 percent up to 28 cents a share, according to Yahoo News. This is the second share buyback since the company had a previous purchase that started in 2008. That buyback will expire at the end of this month.

Microsoft CFO Amy Hood commented on the company’s move, “These actions reflect a continued commitment to returning cash to our shareholders.” Compared to other cash rich technology giants, its always interesting to see what companies make which moves getting cash off of their balance sheet, or repurchasing shares. This share buyback happens after the departure of Microsoft’s former CEO, Steve Ballmer.

  

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Microsoft recently bough Nokia, the former phone manufacturing legend, for around 7 billion dollars. This maneuver is a part of Microsoft’s plan on “refocusing the company around devices and services” to get onto the smartphone bandwagon, which it had completely missed. At this point in the technology industry, giants Apple and Google are leading and Microsoft is lagging.

Part of its plans to come into the marketplace and challenge Samsung and Apple will be the release of its new Surface tablets, tablets that are designed to battle the iPad. Microsoft’s most recent quarter’s profits were almost at $5 billion ($4.9 billion), yet analysts note that investors need to understand the logic of the share buyback and Nokia deal in order to have some of their confidence in Microsoft restored. As the PC market gets shadowed by the dominance of tablets and mobile computing, Microsoft is edging into the game with its new release, hoping to take back some of the market share from Apple and Samsung, the two largest players in those markets.

Microsoft is an American multinational software corporation that develops, manufactures, and licenses different computing products and services. Their 2013 revenue was $77.85 billion and they have 97,000 employees.