Microsoft Corporation Message Board

I agree, and what sucks too, that they announced a stock repurshase too. it seem that MSFT is running out positive NPVs. "END OF GROWTH"



<<It should actually drop more than $3 because not only do you lose the $3 share but you lose the earning's potential of $3 going forward.

Yet you enjoyed to be recalled, as you can have free coffer and cookie.

....the best...It was at one time, not any more. If MSFT were a car manufacturer, the recalls would be monthly.

Yes, all option strike prices will adjust DOWN $3 ex-dividend.

I cannot understand why the near term puts do not have more of a premium.

Will the option strike prices be adjusted to account for the special dividend? If it were a 10% stock dividend, I imagine they would.

Should be interesting...

Good luck with it.

Like you I will ride out the hit...been long softie since 1996. However, I will daytrade (swingtrade) the special dividend stock price fluctuation. Note, I'd only do this with a healthy strong company like MSFT..as I don't have any qualms about staying long more shares of MSFT if I get stuck in a trade.

Good Luck all.....no matter what, this remains one of the best companies in the world.

<It should actually drop more than $3 because not only do you lose the $3 share but you lose the earning's potential of $3 going forward>

The payout isn't worth $3 to investors - it's worth $3 less taxes. As regards the ongoing loss of income on the $3, that's a concern but was already reflected in MSFT's FY guidance after they announced this plan - so the hit has likely already been taken. Keep in mind that just since the announcement, they've added some $4B [more] to cash.

<I don't believe I am...from and accounting point of view, all dividends are paid out of cash and recorded as dividend expense. This will be no exception. >

No one is arguing differently. The issue is whether or not the cash is from operations or from existing balance sheet cash. In this case, it's existing balance sheet cash.


<The only point you are correct on is that MSFT earnings power on cash investment will decrease after the dividend, but this has no direct coorelation to stock price.>

Actually, I believe I'm correct in all of my statements so far. WRT the earnings power on cash, a hit has already been taken starting in Q4 (when they moved the cash to shorter-term investments) and wrt guidance for the entire year (which they reduced due to the decreased interest rate expectations and the expected payout).

It should actually drop more than $3 because not only do you lose the $3 share but you lose the earning's potential of $3 going forward.