Motivation? The fact that Bill G won't have to pay 50 million in taxes on the 100 milliion in dividends he gets, along with all the other director, execs and assorted billionares who own lots of stock might be one reason...
The following I extracted from my email to FundPilot clients tonight:
As for the market, Microsoft shocked everyone by announcing it would pay a dividend for the first time ever (16 cents a share, or about 0.3% of the stock price) and scheduled a 2:1 stock split, along with beating the analysts expectations for earnings by a penny. Given that Microsoft has about 5 billion shares, that means they made $50 million more than expected. For comparison, Motorola and Hewlett Packard pay between 1.6 and 1.7% of their share price in earnings. But hey, if you are Bill Gates, the Bush tax relief on his $99.5 million in dividends will come in handy saving for the kid's tuition.
Unfortunately, they also reduced forward earnings guidance by about $300 million for their fiscal 3rd quarter, and Microsoft agreed to settle the California lawsuits for $1.1 billion, or about $1.10 per share. Personally, I'd rather have seen them pay that in dividends, and the 16 cents a share for lawsuits. The stock has fallen about 3.5% in after hours trading (about $1.94) at the time of this writing, so you could actually get more of a tax benefit by selling 1 share for every 10 you own and writing off the loss. And I would suggest doing it tonight if you are taking me seriously, as tomorrow looks to be miserable.
scott |
