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Microsoft announces $60B stock buyback plan

Yahoo Finance's Dan Howley talks Microsoft's new stock buyback plan and dividend hike.

Video Transcript

AKIKO FUJITA: Let's turn our attention to one stock that is moving to the upside in the tech space. That is Microsoft, getting a lift today on the back of two announcements-- a $60-billion share buyback and a big promotion for Microsoft President Brad Smith. Let's bring in Dan Howley for the very latest on that front. Dan.

DAN HOWLEY: That's right, Akiko. Microsoft is going to be having a $60-billion stock buyback plan. That is massive for this company. It's one of the most expensive publicly traded companies in the world, just behind Apple at nearly $2.3 trillion. They're trending that direction today. They also are increasing their dividend by $0.06 to $0.62 a share, so that's obviously going to be a big boon for investors and something that they're obviously going to be very happy about.

How Microsoft is paying for this buyback, though-- they have a huge war chest right now, and they're using it to make acquisitions, which they've been doing readily, as well as for the stock buyback program. So a big deal here. I think otherwise, the other idea is that the promotion of Brad Smith-- he will now be vice chair of the company, not of the board. But he was previously president with Microsoft. He helped a lot with the legal issues and some of the ethical to-do that Microsoft has been dealing with, whether that's with facial recognition or cybersecurity, cyber warfare, things like that he's also had discussions about. So a big promotion for him.

And overall, it just looks like a better picture for Microsoft in general, not that they've needed any kind of improvements considering how much the stock is up this year and how much the stock has grown since the public cloud really came into view and Microsoft's participation in it really became full throttle. Right now, they're behind Amazon but gaining on them in terms of market share, though there are other players in the space that are also gaining and pulling away from Amazon. That includes the likes of Google and Alibaba. So a big to-do here for Microsoft today. The stock obviously reacting here, and that's just up about 1%.

Dan, really quickly, on Brad Smith, it's been interesting to see this promotion. Largely, he's been seen as the spokesperson of the company in many ways. He's obviously the lawyer for the company. He's been really front and center on a lot of these initiatives the company has put forward, Satya Nadella more strategy behind the scenes, if you will. What does this promotion, you think, mean in terms of which direction Microsoft is trying to go?

DAN HOWLEY: Yeah, I think it really just allows Smith to really stand out more as almost a-- I want to say the the moral compass of the company to a degree. That tends to be the way he expresses himself. He pushes back against certain initiatives, makes his voice heard, and represents Microsoft in that way. It seems like he's the one where if there's going to be any kind of controversy, he'll be out there dealing with it while Satya is the one who's really doing the overall grand picture of the company.

And that's, I think, how they want this to really roll. And it's worked well so far. We've obviously heard from Brad Smith on numerous issues that we really haven't heard from Satya Nadella on, whether that's facial recognition technology, cybersecurity, the idea of having a cyber warfare line of movement, not necessarily crossing over into dangerous territory, having a baseline for where countries should stand. Those are things that Brad Smith has really talked about, and Satya Nadella doesn't. He focuses on where the company is going in terms of product and discusses that in the future that he sees for the company. So it really is interesting to see how these two people provide a voice for Microsoft overall.

- Dan Howley bringing us the latest there on Microsoft. Appreciate that.

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