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Technology Stocks : Intel Corporation (INTC)
INTC 40.01+1.7%Jan 6 3:59 PM EST
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To: Amy J who wrote (178783)7/21/2004 12:22:28 PM
From: The Duke of URL©  Read Replies (3) of 186894
 
"unless they strongly felt the hightech market was very solidly rebounding."

There are several notable issues of which that is one.

I do agree with you that Bill knows that cash, even for MS is hard to come by and easy to lose.

They must have done a pretty complete analysis of the consistency of the 12 Billion dollar a year cash machine.

And that they have a visibility somewhat.

But lurking in the background is the Accumulated earnings tax which is, IIRC, 50 to 70%!!! MS has already had discourse with the IRS about this over the years.

This is the key:

A company is allowed to accumulate but not distribute earnings IF there is a need for the money, without tax consequences.

Now that the big Antitrust case has been settled THIS MONTH for the first time, MS must do something.

It would not surprise me in the slightest to find that MS has had a sort of informal "standstill" agreement with the IRS pending that litigation. The IRS would not wish to look like it was unfairly jeopardizing a Federal Litigant.

Today, it is a different story.

Truth be known, I am moderately surprised that MS did not buy SAP and Salesforce.com, but Bill is pretty smart.

He is also a modified disciple of Buffettology. Buffetology deals extensively with the use of money for dividends. Short take: Bill has enought to buy the companies they feel good about and the rest, he has no use for.

It is to be noted that there is brand new tax law promoting the distribution of dividends, which I have been in favor of for 30 years.

That law, and MS's example will boost ALL companies.
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