Microsoft to issue bonds: Will it go shopping?

Microsoft to issue bonds: Will it go shopping?

Summary: Microsoft on Monday said in a regulatory filing that it will issue bonds for the first time to raise and $3.75 billion of capital.

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TOPICS: Microsoft, Banking
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Microsoft on Monday said in a regulatory filing that it will issue bonds for the first time to raise and $3.75 billion of capital. And given that Microsoft doesn't exactly need the money you can't help but wonder what the software giant will do with the dough. 

For the record, Microsoft is using the net proceeds from the bonds for "for general corporate purposes, which may include funding for working capital, capital expenditures, repurchases of our capital stock and acquisitions." Microsoft confirmed the pricing in a statement

Bloomberg reckons that Microsoft will buy back shares. Boooorrrrrinnnngggg. Let's go the acquisition route. Microsoft has an AAA credit rating and will have Wall Street fawning over these bonds. Wall Street already fell in love with IBM, Cisco and Oracle bonds. What's not to love about companies with gobs of cash issuing bonds?

And like Cisco and Oracle Microsoft could become acquisitive (more than it already is). Microsoft could buy Yahoo's search business (highly likely) or maybe take a run at SAP (less likely). Activist shareholder Eric Jackson urges Microsoft to go shopping and notes that the software giant can easily ramp up its debt. 

Microsoft may just be taking advantage of cheap rates to buy back shares, but chances are it's bolstering its war chest for something. That something could be a search deal with Yahoo or a systematic plan to go shopping just like Oracle has.

Topics: Microsoft, Banking

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29 comments
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  • more likely

    M$ has run out of cash and is going belly up.
    Ballmer is just trying to prolong the life of the beast before this new Enron will be exposed.
    Linux Geek
    • ROTFLMAO!!! Thanks Dude! You made my day!!! NT

      .
      JustAnAboveAverageJoe
    • Dude...

      You're hysterical!
      Fark
    • Buwahahahahaha

      God you really are clueless aren't you?
      No_Ax_to_Grind
    • One thing about you guy, you show why Linux is to be avoided.

      Uh huh, known by the company it keeps and when "supporters" like you demonstarate you have loss all touch with reality it shows why no one wants or should use Linux. Keep up the great work! Between you and Stallman you will manage to kill Linux yet.
      No_Ax_to_Grind
      • in case you did not read it

        Linux is growing 900% a year while windoze market share is slipping down:
        http://blogs.zdnet.com/gadgetreviews/?p=4157
        So much for killing Linux!
        Linux Geek
        • 900 x .0000001 => 0, not world domination

          Huge growth rates mean nothing. A huge increase in a VERY small number still equals a very small number.

          Consider if you will, that Linux lost 95% of the netbook market in a year. Whilst Linux may do well on dedicated/limited-purpose devices like phones,
          routers, switches, etc., it won't supplant Windows just yet.

          And let's not forget that this is a guess pulled out of an analyst's arse based on nothing.

          Fact is that it's not Microsoft you should be worried about - OSX is Linux's biggest problem.
          de-void-21165590650301806002836337787023
      • Here, take a chill pill

        now get back to fixing Windows problems.
        nizuse
      • Reality? Reality?

        What about reality? GM used to be the largest most
        profitable company in the world with revenues that
        exceeded the GDP of 90% of the countries in the
        world. Toyota used to be one of the smallest
        companies in the world. Where are they both now,
        Toyota is bigger than "hat in hand" GM. Are you
        saying that that cannot happen to arrogant MS the
        same way it happened to arrogant GM?

        They assumed they "made the market" instead of the
        consumer. Tell the consumer what they need
        instead of doing market research to find out what the
        consumer wants. MS would never do that, right?
        And there is no other market outside the protection
        of the broke US right?
        bigpicture
  • It is to pay for this.

    http://www.theinquirer.net/inquirer/news/1137267/eu-software-makers-responsible-code

    Software finally to be held accountable. This will be costly for a sieve like Windows.
    bjbrock
    • If that were the case

      We would see Apple borrowing money as fast as they could.
      The unpatchable, bloated mess that is QuickTime will cost them a fortune.
      mdemuth
      • It would be a huge bit less than to fix all the Windows OS's (nt)

        No Text
        Bruizer
      • Not to mention iTunes on windows!

        nt
        Patanjali
    • Then Red Hat is history.

      Just think of it, beign sued into oblivion over code they didn't write. Sweet...
      No_Ax_to_Grind
      • M$ FUD again?

        Red hat has no IP issues or royalties to pay to patent thugs.
        M$ on the other hand has huge liabilities and ongoing royalties to others.
        Linux Geek
  • My sense is that it will go into

    massive data centers.
    No_Ax_to_Grind
    • Check! Another one of

      NoAxe's predictions that we will follow up on!

      (remember his 'SCO will win' prediction?)
      nizuse
  • Doesn't need the money???

    Guess someone hasn't been paying attention: M$ is HURTING BIG-TIME!!! We've watched PC sales plummet during this economic downturn; we've seen the UTTER REJECTION of Vista; and the emergence of well-accepted alternatives to M$ Office (Google Docs, OpenOffice, etc.) -- whether YOU like the alternatives or not, the MARKET does. This all adds up to a pretty bad drop in revenue vs. 2 years ago. How can you blindly assume M$ "doesn't need the money." That may be the case. Or it may not. It is no longer assumable!!!
    Techboy_z
    • So you admit that you have not paid attention?

      Every finacial entity in the world knows that Microsoft is sitting on a pile of cash that many a company (and country) would like to have.

      Plus with 15.8 Billion income on 61.2 Billion in sales, It is quite easy to say that Microsoft does not need the money.

      That much does not need to be assumable.
      GuidingLight
      • Pay the Fines

        It needs about this much money (the amount raised
        by the bonds) to pay the currently levied EU fines.
        With probably more coming from other countries
        such as India and China.
        bigpicture