Microsoft announced about a month ago that it would attempt to buy back about $40 billion worth of stock under a Dutch auction format. This announcement came in the heels of decent fiscal year results for the world's largest software maker. Well, the auction ended with only about $3.8 billion in stock sales back to the Redmond giant, which was much less than half of the $20 billion minimum Microsoft wanted.So, this is a good and bad sign for Microsoft. On the plus side, its shareholders apparently are not interested in selling at the range of $22.00 to $24.75 per share. This is a pretty strong statement from institutions and individuals alike that MSFT shares will have upside in the future. On the down side, Microsoft now needs to amend its offer.
So, what is Ballmer & Co. doing? Why, the MSFT guys and gals now want to buy even more of its stock back, having increased its need for shares for an additional $16.2 billion through June 2011. If you're a MSFT stakeholder, what are your thoughts? Did you sell or did you not sell? Being a MSFT shareholder, I opted to not sell back with the valuation of anything under $35 per share. What did you do?
[Disclosure: I own MSFT shares as of 8-21-06]
Brian White has worked in various executive positions in technology and telecommunications and now focuses on editing and writing.











Reader Comments (Page 1 of 1)
8-21-2006 @ 3:07PM
R.Nguyen said...
I absolutely will not sell my MSFT holding for less than $33.50/share.
MSFT is a debt free cash generating machine. It's stupid to sell it any cheaper than this amount.
8-21-2006 @ 4:14PM
Kevin Pollock said...
What? Are you kidding me? I am buying MSFT right now. Talk about a good buy on a strong company with no debt. Ask yourself this... Do you think that Microsoft will be in business 10 years from now? And if so, will they be doing better than they are right now? Of course they will. Anyone who can't see the writing on the wall and doesn't take advantage of a good buy will simply lose out on a good opportunity.
8-21-2006 @ 5:07PM
myron abood said...
I too will not sell for anything less than $34.
8-21-2006 @ 5:33PM
David Neubert said...
I did not tender but did sell part of my position at $25.19 into that first spike up in prices. I was over my normal maximum exposure in MSFT. And now will hold my position at my normal full position. Barring a dramatic price increase I plan to hold the position through the end of the year.
Disclosure: I currently own MSFT.
8-21-2006 @ 5:47PM
Erik said...
Haven't sold, don't want to start. I was bummed I didn't have enough money to pick up more MSFT when it was at $22 a share.
8-21-2006 @ 5:59PM
Kevin Frost said...
I'm in it for the long haul. MSFT is a powewrful industry leader with no real competition.
8-21-2006 @ 8:18PM
hurst sommer said...
too low will not sell
8-21-2006 @ 8:19PM
hurst sommer said...
too low , will not sell
8-21-2006 @ 11:34PM
Investorial said...
I just have a question for all these commenters. When was the last time the stock price broke $30? (split-adjusted of course) Just check the history ... we haven't seen those levels since '02. Now I'm all for saying that the market doesn't make sense in the short term, but that's 4 years of valuation by the market already.
I find it extremely funny that all these people are tauting figures over $30 with no real valuation explanations. Well, shoot for the sun, and while you're at it, get people hyped up too! At least when you land on the moon, you'll get out happy leaving the people that bought from you at $28, $29 in the dust.
I just detest random comments like these that serve no purpose but hype things up!
8-21-2006 @ 11:55PM
Sheldon said...
Have to respectfully disagree with most of you and do not have any idea what you are supporting your fantasies with but MSFT will be $22 again before it is $35. It has a sky high price-to-sales ratio (historicaly more important than P/E)of around 7 and a price to book approaching 6 while only returning about 15% higher than average ROIC...there is more but that's enough to look elsewhere. MSFT may bounce around some but it's not worth what you imagine without a proportionate increase in earnings to match. A lot of wishful thinking here.
8-22-2006 @ 2:08AM
Ruth H. Loud said...
I paid over $36 for my shares and I want more so I will keep it as long as it takes. I am on Social Security and Bill Gates plans to put the stock open to his employees to buy, they are making more each week that I get in a month. He can give them higher salaries.
8-22-2006 @ 10:04AM
Starr Wheeler said...
I can't sell, my cost basis is $3.935 a share. In 1994 I purchased 275 shares for $17,319 and haven't made any additional purchases, but cashed-out $39,790 and was paid $11,904 in dividends and still have $82,500 remaining in stock. Boy, I sure love this kind of math. What a return on my $17,319.
8-22-2006 @ 4:09PM
G-man said...
I remeber fist buying this stock a long time ago when it was in its high 30s. I held on on thhe hopes that it would jump back. Hell no, will I ever sell them back to Microsoft on their Dutch Auction for a major loss. This is the exact type of rip-off that the SEC should investigate. Investors are getting screwed by companies whose incompetant CEOs drive down the stock price then sell out to a "private" company, merge with other companies, or buyback the stocks at well below their fair market value. Or even worse offer stock buybacks at huge profit generating premiums, that the average investor is left out of, (only insiders seem to get to sell the shares back to the company)