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08.06.08

Microsoft Could Soon Enter Debt

Posted in Finance, Microsoft at 3:11 pm by Dr. Roy Schestowitz

An acquisition of Yahoo! would have required Microsoft to borrow over $20 billion from the bank, but as more buybacks loom, it seems possible that Microsoft will enter debt even without having to buy Yahoo. This was actually foreseen before and now it appears more likely that the hidden financial weakness will worsen every quarter. This leads to aggression.

Anyway, one report comes from Reuters, but its original source is Bloomberg, which recently reported on Microsoft's loss of over $90 billion in value this year.

Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) will buy back as much as $20 billion of its stock to boost its flagging share price, Bloomberg News quoted a top-rated software analyst as saying.

Here is the report in the Australia press (wide circulation).

She expects Microsoft to complete the repurchase – at least five times larger than its average per quarter in the past fiscal year – over the next three months.

“They won’t announce it until it’s done,” Ms Bellini said.

It’s curious that they may do so quietly, unlike Novell [1, 2].

It also appears in Bloomberg under the headline “Microsoft $20 Billion Buyback Signaled After Slump”. Microsoft last had about 26$ billion left in the bank, which is a lot less than there used to be. Massive buyouts and fines are partly to blame and future margins erosion is guaranteed to cause further trouble.

Just watch what else has just been reported: Microsoft’s business intelligence general manager quits the company.

Microsoft Corp. announced today that Bill Baker, a Microsoft distinguished engineer and general manager of business intelligence applications for the Microsoft Office Business Platform team, is leaving the company.

Not so long ago it was President Johnson, who left abruptly on the face of it, based on reports. It could incite panic and it does not bode well for the future. Another Microsoft executive appears to have just left quietly. He was hired by another company.

Lyn Reyes, formerly local business lead for Microsoft Dynamics, was appointed by Gurango Software Corp.’s (GSC) vice president for global sales.

Times are changing. These are truly interesting times for those who anticipate radical change in the software industry.

“Freedom is primarily achieved by providing the means for self-reliance. When individuals can provide for their own needs independently, without placing burdens on others, they are more free.”

Terry Hancock

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4 Comments

  1. twitter said,

    November 12, 2008 at 3:40 pm

    Gravatar

    Here’s the WSJ Reporting on the $40 Billion buyback.

    Microsoft today said it would spend $40 billion on a larger-than-expected stock buyback program–one of the largest such efforts in history and more than double what one analyst predicted several months ago. … nearly as much as the software giant proposed to spend this year in acquiring Web advertising and search company Yahoo. … notable in the announcement was Microsoft’s plan to tap the debt markets for the first time.

  2. G. Michaels said,

    November 12, 2008 at 3:48 pm

    Gravatar

    I would be weary of comments by this ‘twitter’ person. See:

    http://slashdot.org/~SockDisclosure/journal/214377

    Note: writer of this comment adds absolutely nothing but stalking and personal attacks against readers, as documented here.

  3. twitter said,

    November 12, 2008 at 3:52 pm

    Gravatar

    Give it up, stalker.

  4. G. Michaels said,

    November 12, 2008 at 10:35 pm

    Gravatar

    You should get busy:

    http://slashdot.org/comments.pl?sid=1022765&cid=25690127

    Note: writer of this comment adds absolutely nothing but stalking and personal attacks against readers, as documented here.

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