Great move by MSFT (Nokia); Lenovo to benefit from Windows 8.1; China covered
Microsoft will be using $7.2 billion in cash from its balance sheet. With approximately 90% of its cash stashed overseas, this allows the firm to use the cash without the tax consequences of repatriation. Microsoft will continue to operate the handset business in Finland and open a new data center in Finland, and it has made available to Nokia EUR 1.5 billion of financing in the form of convertible notes. We believe execution will be the key to this transaction. Because Microsoft will now own all of the components in the smartphone value stack, it should be easier for it to respond more nimbly to changes in the market.