We started Monday and the stock was about $25.25 or something, a few minutes ago it was $27.50, so why up $2.25 in 4 days? This morning I read this article that quotes an analyst that thinks MS is about to buy back a bunch of stock, maybe even $20 Billion worth. Now first I don’t have any in-side information, I am not a stock broker, contact your own financial adviser. I am a Microsoft Stock owner and employee. And I like doing a little math. So by my estimate and calculations, Microsoft stock trades about 70 million shares a day, and at $25 a share that’s about $2Billion a day. So for Microsoft to buy back $20 Billion in stock in 90 days, that would have to be somewhere about 10% of all the stock bought every day for the next 3 months. Maybe that explains why the stock is up this week, hopefully that will continue.
I also looked up on moneycentral.msn.com the P/E ration of Microsoft. P/E is price to Earnings, basically how many years it would take to take all of the profits to buy the company, so take all the outstanding shares times the current price, divide by last 12 months profit. Currently our P/E is about 14 or 15, future(looking at next year) it’s amazing low at 12 or so. If you look back at the history of this company and other High tech companies, P/E’s have been as high as 75-100. Go look at the P/E of our competitors. Our P/E is even with big companies, banks, GE, etc.
Why do you think MS stock is up? What will it do in the next 90 days if MS really buys back that much stock?