Feeds

Microsoft, HP shower shareholders with buyback cash

Yes, we think we're a real bargain right now

Build a business case: developing custom apps

Microsoft is trying to put a floor under its share price in a tumbling stock market by launching the biggest share buyback program in history.

The software vendor announced the $40bn (sort of) jamboree for shareholders yesterday, as HP declared it too would open up the coffers and buy back shares to the tune of $8bn.

Microsoft has been criticised in the past for holding onto a vast cash pile. Now is as good a time as any for it to hand back something to its shareholders

With its share price languishing around the $25 mark – well off its 12-month high of $36 – Microsoft gets more bang per buck. In the medium term it will be hoping to stabilise its share price, and gets more shares back in-house for passing around in the form of options and the like.

Microsoft tickled shareholders further by upping its dividend to $0.13 per share. At the same time, its board has authorized debit financing to the tune of $6bn, which it will use for general corporate purposes – including stock repurchases.

Funnily enough, HP also chose to announce a stock repurchase program yesterday, though this was a more modest $8bn. It said the buyback was part of its “ongoing program to manage the dilution created by shares issued under employee stock plans and to repurchase shares opportunistically.” HP’s shares at $47 odd are off its 12-month high of $53.41, but also well up on the $40 they dipped to earlier this year.

This might all seem like a startlingly business-as-usual stance in the face of an unprecedentedly volatile market. The firms may simply want to give a little something back to investors in these desperate times.

And in the longer term they may be looking to ensure they have plenty of stock options to splash around to new recruits, now that the banking sector no longer looks so attractive the nation’s youngest and brightest. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
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.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.