“Under pressure from Microsoft Corp. investors to return a portion of the company’s $35 billion cash reserve and revive a flagging share price, Chief Executive Steve Ballmer Wednesday defended the company’s ‘first-class problem’ of having too much cash,” Reuters reports. “Ballmer, speaking to investors at the Sanford C. Bernstein Strategic Decisions conference, said Microsoft prefers to have the cash on hand in order to take risks on new technology and other things important to the company’s operations.”
“Microsoft surprised investors in late April by announcing that it would sacrifice billions in profit next year to invest in new business areas. Analysts estimated that the company planned to spend $2 billion more than initial forecasts. The share price fell on the news, marking the latest decline for a stock that has underperformed every major U.S. equity index since the start of 2002,” Reuters reports. “Shares of Microsoft (up $0.10 to $23.25) rose in early trade on the Nasdaq. The shares are down 11 percent since the start of 2006.”
Full article here.
MacDailyNews Take: Just how much are towels, anyway? What are they spun gold? Seriously, it’s smart to keep a strong cash reserve for investments, but $35 billion? On the other hand, with bloated Microsoft’s obvious inefficiencies, even $35 billion might not be enough. Microsoft’s true “first-class problem” is the sales guy in the corner office who’s responsible for a stock chart that’s been flatlined for years. Hopefully, he stays as Microsoft’s CEO for as long as it takes.
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Haha–Google must have got too much flack for putting Ballmer’s picture up when you do a Google Search for “Uncle Fester” his picture used to be first and then 2 Festers. Now all 3 are Uncle Fester and no Steve Ballmer.
Wonder who made the call and read the riot act.
Too much cash and too little brains.
OSxdude – Re: iDell – $8,000.00 maxed-out. Can you imagine the ProMac you will be able to buy with that kind of cash??? It will crush that machine just by booting up.
>”Microsoft brand heroin in the form of Flinstones Chewables”
—> Ballmer is already beta testing them……
Haha–Google must have got too much flack for putting Ballmer’s picture up when you do a Google Search for “Uncle Fester” his picture used to be first and then 2 Festers. Now all 3 are Uncle Fester and no Steve Ballmer.
A Google search like that which only returns Uncle Fester results is simply being technically accurate. If you want to see Ballmer, do a search for Steve Ballmer.
I guess the risk that MSFT can do a hostile takeover of AAPL is zero, given that anti-trust regulations would prevent that. But what’s to prevent a MSFT-funded private entity from raiding AAPL?
Microsoft prefers to have the cash on hand in order to take risks on new technology and other things important to the company’s operations.
He’s right. Continually delaying Vista is risky. I’d want at least 15 billion to cover that.