MSFT Appeal
"MSFT currently has $18 billion in cash, $20 billion in investments, and recently has been adding cash to its coffers at the rate of about $4 billion annually. That should go a long way to helping the company withstand the litigation."
Mike,
I would not be so sure that MSFT's cash position will help it out. First, Judge Jackson could substantially adjust that cash position in the DOJ suit. Why can't he just enter an order saying that Microsoft's fine is $78B if he wants to sop up its current cash, force sale of all its investments, and drain its net cash over the next 10 years? Second, a steep fine would force MSFT to buy a very, very expensive bond to stay execution of the judgment pending appeal. Third, Microsoft's investments include its willy-nilly, idiotic investments like the $5B preferred stock in AT&T. Fourth, the breakup triggers costs to separate the operating system from the applications software. Fifth, the tobacco companies make a ton on money but they have withered under years of litigation from plaintiffs without the benefit of pre-made lawsuits created by settled findings of fact. Sixth, even if Microsoft can withstand the litigation from the private plaintiffs (something the numbnuts in Microsoft Legal have shown no propensity to doing), its stock may reflect a different valuation.
Which brings us to your bailiwick.
saukriver |
