Microsoft files for debt offering
Microsoft on Monday filed to issue debt that could see the company raising billions in additional capital.
The filing, which was made with the Securities and Exchange Commission, doesn't specify an amount to be raised.
In September, Microsoft's board authorized the company to issue up to $6 billion in debt. It has already issued $2 billion in short-term debt, known as commercial paper. Given that, Microsoft could potentially issue $4 billion as part of the new debt offering, which is structured as a three-part offering, with varying maturity dates.
The company did not specifically say what it would do with the money, offering a boilerplate statement that it would use the money "for general corporate purposes, which may include funding for working capital, capital expenditures, repurchases of our capital stock and acquisitions."
Microsoft declined to comment in more detail on how it would use the money.
Naturally, though, the filing prompted speculation that Microsoft might have its eye on an acquisition target, with Reuters naming business software giant SAP as one possibility. The two companies had merger talks several years ago.
During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina. 
Your beloved Apple needed a cash injection from Microsoft in 1997. Without that $150 million investment from Microsoft, Apple would be singing the bankruptcy blues.
[CNET editors' note: Personal attack deleted.]
Actually, without that $150m in non-voting stock that Microsoft bought, Gates would have likely had to eat 10x that in damages paid out to Apple, post-lawsuit (you really should read the history of that deal, instead of just eating the mythology, eh?)
Microsoft is not doing this because they need money. It is exactly the opposite: They have so much cash and the greatest credit rating (AAA, the only company to receive this rating in the last decade) ever, so they can basically borrow money for almost zero interest. They have the assets to invest this money, create more jobs, and make even more money. Any company would die to have a similar position.
If you are interested in the facts (I know you are not), you can read them here:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNvRB6RKQTmE
Wow, when will you Winbots get over this ridiculous chestnut? Microsoft no more "saved" Apple in 1997 than I could save General Motors by sending them a check for $50. That $150 million was a drop in the bucket for Apple, even in those dark days. It was a legal settlement, nothing more. But if you Microsoft drones insist on clinging to the idea that Microsoft was the savior of Apple, be our guest. I'm sure it will help you cope with your miserable computing experience.
I'm sorry, I do not understand your comments or how they relate to the story. Please elaborate your comments to make your case more clear, if you would. It would be appreciated.
@Monkeyfun16:
If you are trying to impersonate Monkeyfun14, then you're doing so at your own risk. Impersonation and personal attacks such these are violations of the CNET terms of use here.
Plus, it's just lame. :)
If your goal is to set out to make a fool of yourself, then you have succeeded greatly.
If your intent was to mock Monkeyfun14, then your attempt has failed.
If you were so unfortunate and unimaginative as to create a new user account to mimic another person here on CNET, then it is an achievement worthy of AppleRocks1963. I'm not sure if that is the sort of company you wish to have, but it does put you right up there with them on the credibility and respect scale.
Actually Gates didn't have to pay anything post lawsuit as the lawsuit was thrown out.
Gates is unrelated to the issue. It was Microsoft vs Apple, and Gates would not personally have been required to pay damage.
Why does MS need to borrow cash if it has billions of cash on hand?
It does raise the question of what they want the money for.
Buying SAP makes sense since that would turn MS into the largest software company in Europe and get the Eurocrats off their backs since they can simply threaten to outsource the jobs if the paperpushers keep coming after them.
How's that for a euro-style conspiracy theory? >;-)
Why would you go and get more debt if you have 40-50 billion in the Bank ?
This does not make sense to me.
If you can make 10% on your 100 bucks.
That's 10 bucks a year profit. 10%.
But if you use your 100 and borrow 200. Even paying them back 5 bucks each in interest.
You now make 20 Bucks on your 100 initial bucks. That's 20%.
That's leverage.
Of course when times are bad for your company you stand to lose a lot of money as well. That's the risk.
For MS to borrow now they are betting that they will have investmets worth leveraging going forward. They will win big coming out of this recession, or tank.
:)
From #1way ahead to #1 still ahead but not so much as before?
- by SpiritWater May 11, 2009 9:28 PM PDT
- Microsoft was talking about opening their own retail stores. Four billion could buy a lot of retail space.
- Like this Reply to this comment
-
(34 Comments)