PC sales bolster Microsoft profits

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The bad maths of a mad market

So, let's see. You get 24cents a quarter in a good quarter for a share that costs you $17 and 9 cents a share to buy.

That means you get a return on your investment within 17 or 18 years, assuming all four quarters for all 18 years are as good as this last one. Meanwhile, there are 11 billion of these shares in existence, because the company has never rewarded it's employees with bonuses (in fact, anyone who's had a "Bill meeting" will tell you that rewarding, or even smiling at, employees is not a matter of Microsoft policy). Instead, Microsoft has consistently given out shares to its employees, who promptly sell them, since, until ealrier this year, Microsoft has never given out a dividend on its shares, and so holdoing nto the things was pointless.

So now we arrive at a situation where there are eleven /billion/ of the things in existence, and the company is worth $35 billion dollars. Meaning that if we liquidated the company tomorrow... we'd each get 3 dollars a share...

And they pay out 24 cents each in a good quarter, cost seventeen dollars to buy and will take two decades to pay back their cost, if you assume Microsoft can just keep on and on growing.

The best part, of course, is that most of the 35 billion dollars Microsoft is notionally /worth/ is ... yes, you guessed it. HELD IN SHARES.

No wonder anyone wants to upset he status quo!

Posted by: dw@...   Posted on: 10/24/03 You are currently: a Guest | Members login | Terms of Use

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