I thing it will all depend on if COngress and the White House can reach an agrement or not by late December. There is still 3 weeks to go. the key point will be around Dec 25. If by Dec. 5, there is still no agreement, MSFt may get jum,py and issue a special devidend. Since the chance of having an agreement is high, so MSFt will at this point wait for perhaps a couple of more weeks.
I personally believe having $70 billions of cash in US treasuries do nto make any sense. best thing for MSFt to do now is to aggrasively buying MSFt shares from the open market. I think MSFt can easily buying close to 10 billions of $ each of the following 4 quaters. Buying shares now is the most attrcative since the share price has come down to so low, and it is just so smart to buy these shares here for cancellation.
MSFt in 2009 bought back some 20 billions $ of shares, and this resulted in total share count down some 15%. This boasted earning per share by the same %. The reason MSFT bought back aggrassively is because MSFt shares were so cheap then. But, in terms of p/e, exclusing cash , no, p/e is even lower.
cash at hand $70 billions, this is almost $9 per share of cash.
share price now 26$, this leave a net share price of just 17$. since earning over coming year is $3.3, so we have a p/e now just:
p/ e = 18/3.3 = cheap 5
That is right, effective p/e now just 5.
This is the very reason, MSFT BOD should lanch a super sized buy back program in the area of some $40 billions!!!!!