Microsoft plans $58B stock buyback

The move illustrates confidence in the long-term growth of the company, says Liddell

Microsoft says it will buy back as much as US$40 billion (NZ$58 billion) worth of its own stock through the next five years. The share re-purchase announcement is a follow-up to similar plans made in 2004 and 2006, when the company bought US$30 billion and US$40 billion of its own stock, respectively. This new buyback will run until Sept. 30, 2013.

The company's board of directors also declared a quarterly dividend of 13 cents per share that will be paid Dec. 11.

"These announcements illustrate our confidence in the long-term growth of the company and our commitment to returning capital to our shareholders," said Chris Liddell, the company's chief financial officer, in a statement.

Analysts had wondered what Microsoft would do with its cash after it was spurned by Yahoo. The Redmond, Wash., company first offered to buy Yahoo in February for an estimated US$44.6 billion, but after Yahoo balked and demanded more, Microsoft withdrew its offer in May.

According to Microsoft's most recent financial statement, as of June 30 it had US$23.7 billion in cash on hand.

The news sent Microsoft's shares up US$1.02, or 4.01%, in early trading.

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