Microsoft changing the $40 billion stock buyback offer


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.

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