Microsoft plans $40B stock buyback

Move pushes shares up slightly

By Gregg Keizer

September 22, 2008 12:00 PM ET

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Computerworld - Microsoft Corp. today said that it will buy back as much as $40 billion worth of its own stock during the next five years.

The share-repurchase announcement is a follow-up to similar plans made in 2004 and 2006, when the company bought $30 billion and $40 billion of its own stock, respectively. This new buyback will run until Sept. 30, 2013.

The company's board of directors also declared a quarterly dividend of 13 cents per share that will be paid Dec. 11.

"These announcements illustrate our confidence in the long-term growth of the company and our commitment to returning capital to our shareholders," said Chris Liddell, the company's chief financial officer, in a statement.

Analysts had wondered what Microsoft would do with its cash after it was spurned by Yahoo Inc. The company first offered to buy Yahoo in February for an estimated $44.6 billion, but after Yahoo balked and demanded more, Microsoft withdrew its offer in May.

According to Microsoft's most recent financial statement, as of June 30, it had $23.7 billion in cash on hand.

The news sent Microsoft's shares up $1.02, or 4.01%, in early trading.

Read more about management in Computerworld's Management Knowledge Center.

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