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Dividends reward short term shareholders. Capital reinvestment rewards long term shareholders (if it's successful).
by dstein 15y ago
Dividends reward short term shareholders. Capital reinvestment rewards long term shareholders (if it's successful).
- Duff 15y ago10 years ago, Microsoft was $35. Today it is $25 and change. Not very rewarding. Microsoft is like the electric utility of the technology business -- they should embrace that or wake up and break up the company into manageable parts. Buying Skype? That's not creating shareholder value.
- dstein 15y agoWhen you look at Microsoft's acquisition history http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Microsoft http://en.wikipedia.org/wiki/List_of_mergers_and_acquisition... There aren't many very large brand name "statement" acquisitions there. Most are small companies you've probably never heard of. I think this Skype acquisition is a clear message that Microsoft is playing hardball now.
- garethm 15y agoFor what it's worth, there was a stock split in 2003 [1], so the same stock would be $50 today. 1: http://www.microsoft.com/investor/InvestorServices/FAQ/default.aspx#section_4 http://www.microsoft.com/investor/InvestorServices/FAQ/defau...
- smackfu 15y agoIt's funny that this comment is in response to someone suggesting a dividend, yet completely ignores the dividend in mentioning the stock price over time.
- philwelch 15y agoIs it better for shareholders to reinvest dividends from mature firms into growing firms, or for mature firms to continue investing in their own stalled growth?
- ikono 15y ago>if it's successful That's a big if for them right now. When you're trading at a P/E in the single digits ex cash, the market is telling you they have no faith in your ability to re-invest your earnings(especially when interest rates are so low).