Microsoft Puts 'Stock' in its Stock

Microsoft will be in a position to initiate a buy-back of its own stock next week, when a six-month waiting period ends following the purchase of Visio software by Microsoft. Analysts agree that this is a positive sign for Microsoft, which in the last year has been plagued by many troubles with regulators and antitrust.

Microsoft bought the Visio program in January 2000 for $1.5 billion in stock. Visio is a program used primarily for drawings and diagrams, organizational charts, flow charts, and site maps. The program was marketed to licensed holders of Microsoft Office earlier this year. It is standard practice for the SEC to rule that a company can't purchase its own stock for six months after making a major acquisition.

Now that the six-month waiting period has expired, Microsoft has the right to proceed with stock purchases. When a company buys back its own stock it is regarded as a positive sign because buybacks of stock indicate that the company's management believes the business outlook is good and that stock prices will increase. Buy-backs generally bring good news for shareholders too as per-share earnings can increase when the quantity of the company's outstanding shares are reduced.

Microsoft will wait until next week when its profit and loss figures are released before making a decision about buying back stock. If the stock continues to rise on its own, which it has been doing recently, the company may hold off on initiating a buy-back program.

You may like these other stories...

By Jason Bramwell, Staff Writer CPAs in New Jersey, New York, and Pennsylvania believe economic conditions in the United States will likely be the same one year from now, and while they predict higher business revenues...
By Jason Bramwell Managers in accounting, finance, and IT are cautiously optimistic about their hiring plans for the fourth quarter of 2013, according to a new hiring outlook survey from staffing firm Brilliant. ...
By Jason Bramwell CPA firms in 2012 posted their first respectable increases in revenues since before the start of the recession; however, professional staff turnover last year rose approximately 50 percent across the...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.