twitter's Journal: Is Microsoft Collapsing? $40E9 Stock Buyback Planned.

In the wake of Vista and the failed Yahoo bid, M$ says they will buy back another $20 billion of their own stock to shore up its falling value.

Steve Ballmer, whose botched bid for Yahoo! Inc. helped drive the stock down 17 percent since February, is about to make it up to shareholders with a buyback of as much as $20 billion

Analyst Jane Snorek at First American Funds in Minneapolis said she has lost confidence that Ballmer will ever get it right on Internet businesses. Her firm sold most of its stock

These are the same issues that have plaguing M$'s credibility and sockprice for months, or years if you look at the not yet matched price before the 1999 crash. Their current weakness is so apparent that Time Magazine noticed. Others speculate fraud is responsible for much of M$'s earnings and that things may be worse than quarterly reports claim. Either way, it's hard to ignore M$'s evaporating cash pile. The Yahoo deal would have put them in debt, another massive bayback will leave them with little cash or debt.

Updates:

August 8 - Analyst David Hilal says the size of the buyback should be $50 billion. That would put the company in massive debt. These rumors have pumped the price up .... next comes a big dump.

Yet another person calls the scheme a pump and dump

Is Microsoft Out of Ideas? ... those of you who would like to see a resurgent Microsoft stock trading higher based on organic growth and compelling new product introductions, you may have to wait for quite a while. In the meantime, financial shenanigans appear to be the rule.

November 20 - With M$ stock hitting levels not seen since 1997, the company starts a $20 billion debt issue for the buy backs.

Hmmm

[Captain Splendid]

While the point still stands that both Vista and the botched Yahoo takeover have cost MS dearly, I'd be willing to bet this has as much to do with current (and still-to-come) global economic woes. It's also worth pointing out that they definitely have the cash for this now, whereas it may be a little more difficult to perform this move even 12 months away.

So, while I'm heartily in favour of a shrinking Microsoft, this strikes as something that was probably going to happen regardless of their recent blun

Whoops, out of shells

[David Gerard]

The shell game's been going on for years. That's why it was so shocking when they finally failed to make their quarterly numbers just recently.

Bill said Microsoft was supposed to keep enough reserves to live for two years on no sales at all. Trouble is, they're still living way beyond the means of someone making no sales.

I wonder what the collapse will look like.