Why Does Microsoft Need $3.75 Billion?

 
 
By Darryl K. Taft  |  Posted 2009-05-12 Email Print this article Print
 
 
 
 
 
 
 

In its first ever debt offering, Microsoft raised $3.75 billion selling bonds to investors on May 11, fueling speculation over what the software giant intends to do with the cash.

Microsoft raised $3.75 billion selling bonds to investors on May 11, fueling speculation over what the software giant intends to do with the cash.

In a filing with the U.S. Securities and Exchange Commission, Microsoft said, "We intend to use the net proceeds from sales of the debt securities for general corporate purposes, which may include funding for working capital, capital expenditures, repurchases of our capital stock and acquisitions."

Some observers said they believe the company, which already had more than $25 billion in cash on hand, is likely to use the funds to buy back its stock. However, other speculation ranges from Microsoft using it to make a major acquisition to the software giant preparing to be walloped by a negative ruling from the European Commission in its investigation of Microsoft's browser bundling.

At a public event in Mumbai, Microsoft CEO Steve Ballmer shot down the possibility of the company acquiring SAP. Ballmer dismissed the SAP speculation as "a random rumor."

Meanwhile, talk of Microsoft's interest in Yahoo or parts of that company continue to simmer.

Microsoft said the debt offering is part of a $6 billion debt authorization by the company's board of directors in September 2008. 

 


 
 
 
 
Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.
 
 
 
 
 
 
 

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