How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 483.03

+0.5%

Dec 5 9:30 AM EST

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To: Valley Girl who wrote (35582)	12/16/1999 4:00:00 PM
From: Alan Buckley	Read Replies (2) of 74651

Agree it would be a mistake to let the hoard grow much larger, but they've made some gigantic investments this year and I expect that to continue. It takes time to find and put together such huge deals. I'm sure there are many irons in the fire we don't know about yet. I don't think buybacks would give maximum bang/buck. The entire $20B is only 4% of the market capitalization. The availability of the cash and it's effect of keeping dramatic options open to management is worth more than that IMO, especially given the extreme rate of change currently occurring in their industry. Dividends would be lame for the tax reasons you mention, but also because it would screw up their compensation model. All the employees sitting on large option holdings aren't going to work harder to drive up dividends in which they have no stake.

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