How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 492.01

+1.3%

Nov 28 9:30 AM EST

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To: Bearded One who wrote (10188)	8/19/1998 4:51:00 PM
From: dumbmoney	of 74651

Consider: Suppose that Microsoft stated publically that it would never ever pay dividends, nor would it ever buy back its stock. What would happen to the price? As long as the business is good and growing, the stock price will increase. It doesn't matter whether or not the company generates "excess" cash (more cash then it can profitably reinvest). Excess cash isn't a bad thing, but it's not what makes a company valuable. Furthermore, the value of a company includes the cash it holds, so even a company that stops growing and "never" distributes cash can increase in value indefinitely.

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