Feeds

MS plans two for one stock split

We number-crunch the share price history of the gold mine

  • alert
  • submit to reddit

Build a business case: developing custom apps

Microsoft yesterday announced a two-for-one stock split, effective on 29 March. Stock splitting has more to do with psychology than the purported reason "to make our stock more accessible to a broader range of investors". But of course, this would only be true if a significant number of investors wished to buy one share because they could not afford around $160. The latest split is subject to shareholder approval on 12 March. The exact wording of the announcement gave away that the split was arranged so hastily that nobody had time to book a venue for the meeting, so its only "expected" to be held then. The purpose of the meeting is to approve an increase in the authorised common stock to allow there to be around five billion shares outstanding. It was specifically stated that no executives would make any formal presentations at the special shareholder meeting. The history of the Microsoft share price is the stuff of legends. An original share will now be the equivalent of 144 shares after the current split. The shares were launched at $21 on 13 March 1986, when Gates had some 45 percent of the company. Some arithmetic suggests that value of an original $21 share is worth $11,655, at last night's close. That's an increase of 555 times. This split is the eighth, with the previous one being in February last year. For the latest three splits, Microsoft seems to be splitting around the time the $150 mark is reached. Previously it had split at around the $100 mark. The advantage to shareholders is that splitting often gives the shares a boost by drawing attention to how much they have increased in value, attracting more investors and so driving up the price. It was probably decided on the spur of the moment at one of Microsoft's very informal board meetings that it would be better to split the shares now, soon after the obscenely profitable quarter that has just been announced, rather than giving that independent part of the media that still remains anything to use against Microsoft as the trial nears its conclusion. Keep your loose change ready for a split in IBM's shares: at $185, it's probably due. That's quite a recovery from the sub-$50 price at the end of IBM's dark period. ®

Boost IT visibility and business value

More from The Register

next story
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Microsoft exits climate denier lobby group
ALEC will have to do without Redmond, it seems
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.