Microsoft Announces $40 Billion Buyback and 3.4 Percent Dividend

Jacob Harper |

Facing pressure to return money to shareholders, on Sept 17 Microsoft Corporation (MSFT) revealed a plan to buy back $40 billion in shares and start doling out a $0.28 dividend, constituting a 3.4 percent return. While there is no timeline on the buyback, the dividend – which topped analyst estimates of a dividend increased by 2 cents – will be the second largest among tech companies worth over $100 million, only slightly less than the 3.8 percent paid by Intel Corporation (INTC) .

In June the company first began revealing that a massive change in strategy would be taking place when they unveiled their restructuring as “One Microsoft” as a response to criticism the company was fractured and inter-competitive, and as a result had incubated a toxic corporate culture that stifled innovation.  

Fears the company was stagnating were confirmed on July 18, when the company issued an incredibly disappointing second quarter 2013 earnings report. The report, which included a $900 million writedown on the failure of the Surface RT tablet, caused a 15 percent two-day plunge in the stock that the company still hasn’t fully recouped.

Following the stock plunge, Microsoft has scrambled to try to placate shareholders and retool the company. First came a change in leadership. On Aug 23 much-derided CEO Steve Ballmer revealed he would be stepping down within a year, causing a 6 percent stock spike.

On Sept 3 they announced the purchase of Nokia Corporation (NOK) , making clear their intention to make a play in smartphones, a market in which they have badly lagged.

Now with the buyback and increased dividend, Microsoft is attempting to appeal directly to the pocketbooks of disgruntled long-term investors. Microsoft’s stock is only up 30.37 percent from five years ago compared to a 53 percent gain for the S&P 500. The company is worth 60 percent of what it was in Dec. 1999, when it hit an all-time high of $58.35.

Microsoft edged up on the news of the dividend and buyback, gaining .73 percent to hit $33.04 a share.


(image of Microsoft Store courtesy of WIkimedia Commons)

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
INTC Intel Corporation 35.26 0.11 0.31 21,524,741
MSFT Microsoft Corporation 61.00 1.34 2.25 54,066,978
NOK Nokia Corporation Sponsored American Depositary Sh 4.97 0.05 1.02 5,761,599


Emerging Growth

Reliq Health Technologies Inc.

Moseda Technologies Inc provides mobile and IT cloud computing to increase operational efficiency and security. It develops SmartFleet, a solution designed for commercial use, as well as SmartCare, a mHealth…

Private Markets


The spark hit Jamie when he saw co-workers competing to lose weight. Instead of pizzas and subs, they were eating salads and jogging along the river. Some were sneakily leaving…


Autonomous security robots providing advanced detection capabilities at $7 per hour - aiming to define the future of security. Help #StopTheViolence.