Microsoft: $40 billion stock buyback, dividend increase

I would certainly be happy if I were an MS stockholder. Unfortunately (for me), many dividend paying stocks are going in a reverse direction and suspending their dividends indefinitely.

The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.

Click to expand...

Source:

... they get wind of a take-over brewing? LOL

BTW Just the opposite to what Steve Jobs did.. this is good reading for some background,,,

This indicates that buybacks themselves don't necessarily have a significant, positive impact on share price, even when huge dollar amounts are involved over a long term. They principally appear to have value when there's an opportunity to take advantage of irrationally low stock prices.

Click to expand...

Superfly said:

The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.

Click to expand...

Source:

... they get wind of a take-over brewing? LOL

BTW Just the opposite to what Steve Jobs did.. this is good reading for some background,,,

This indicates that buybacks themselves don't necessarily have a significant, positive impact on share price, even when huge dollar amounts are involved over a long term. They principally appear to have value when there's an opportunity to take advantage of irrationally low stock prices.

Click to expand...

Click to expand...

Thanks for the additional Info's !

Superfly said:

BTW Just the opposite to what Steve Jobs did.. this is good reading for some background,,,

This indicates that buybacks themselves don't necessarily have a significant, positive impact on share price, even when huge dollar amounts are involved over a long term. They principally appear to have value when there's an opportunity to take advantage of irrationally low stock prices.

Click to expand...

Click to expand...

Most tech stocks, including apple's are non-dividend stocks, so buybacks do not affect stock price as much.

In this case, Microsoft stock IS a dividend stock, and thus reducing the number of outstanding shares increases the dividend size for each share holder, thus making the stock more valuable for that reason alone. Consider a .25 dividend per quarter, that's $1 per year x however many years you own the stock, that can more than pay for the cost of the stock itself.