saukriver wrote: It is the ego of the the people at Microsoft who have wanted to build fiefdoms.
Just think of what would have happened had Microsoft taken all their billions wasted* on AT&T, Web-TV, Wince, etc. and used those monies to buy back their shares.
Speaking of utterly wrong, you are! Yours is one or those rare posts that I could find nothing upon which to agree. To think in terms of "the ego of the the (??) people at Microsoft" is as absurd as anything I have ever read. What are you talking about - a "Microsoft ego"? Microsoft has placed investments all over the "I" map - the vast majority far outside any Microsoft "fiefdom" that you allude to. To say that the ATT, WebTV or Wink investments are waisted is absurd. All three investments you cited have the potential to be enormous in terms of business growth for Microsoft. Just read about the amazing growth prospects of ITV and you can see why billions are being poured in by thousands of companies looking for a piece of the action.
And speaking of growth. Your suggestion about stock buy-backs is equally misguided. Stock buy-backs have been long thought as not to present an ideal use for business capital. They do nothing to increase growth whatsoever. Precisely because they do nothing to expand market share or increase products to market. Only EPS, and a company without growth is worth what in todays market, saukriver?
Look, IBM has had some of the biggest buy-backs in corporate history. It has long been argued that these programs do not increase LT shareholder value nearly as much as that money would return if used to expand the business. (Which is precisely what MSFT is attempting to accomplish - gaining growth through alternative revenue streams)
You wrote:
The goal is to increase earnings per share. Sheer "Growth in earnings" and "growth in sales" should not be the SH's objective at all. (It may be the goal of empire builders at a Lucent, AT&T, Microsoft, etc. ) But sheer size of earnings is just silly if it is diluted over a larger and larger pool of shares. The focus for me is increasing earnings per share.
Utterly wrong again! I'm sorry, but in todays economy it is ALL about market share and growth. "Growth in earnings" and "growth in sales" is a fundamental measurement used throughout the investment community. For you to claim it is silly is absurd! Dilution is a fact of life as companies grow! Splits also dilute earnings, are they "silly" as well? Increasing the number of shares increases 'liquidity', which has many beneficial effects to shareholders. Saukriver, what would the market cap of Microsoft be today if they maintained the same float they had the day of their IPO? Growth is multi-dimensional. You have to understand that - especially in an investment such as WIND with its roughly 3 billion market cap. WIND must grow - just like any other competitor for investor's capital.
Good luck to you,
Eric |
