Friday, September 17, 2021

Microsoft shares lead on $60 billion buyback program

Microsoft Corp. U.S. shares rose 1 percent in early trading on Wednesday after the company announced a $60 billion share repurchase plan, its biggest ever.

The announcement comes just days after two US Senate Democrats unveiled a proposal to tax corporate stock buybacks to help with President Joe Biden’s $3.5 trillion investment plan.

Senators said the “Stock Buyback Accountability Act” would encourage large corporations to invest in their employees rather than enriching investors and executives by raising stock prices.

Democrat lawmakers have also proposed a substantial roll-back of tax cuts implemented by Donald Trump’s administration, including raising the top tax rate on corporations to 26.5 percent from the current 21 percent.

Microsoft’s shares have risen nearly 35 percent this year, making it the world’s second most valuable company with a market capitalization of $2.25 trillion.

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The buyback plan, which has no end date and can be terminated at any time, follows similar announcements by other US tech giants.

Apple and Alphabet said earlier this year that they were returning $90 billion and $50 billion to their shareholders, respectively, and have accelerated their plans since corporate tax cuts in 2017.

“They have to be opportunistic… given the ambiguity of the future of the tax law being well defended,” said Doug Siocca at Kavar Capital Partners, which owns shares of Microsoft.

Microsoft has benefited from a quick turnaround in demand for cloud computing and laptops during the pandemic and amassed $130 billion in cash and cash equivalents. It announced a final buyback program of $40 billion in 2019.

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This News Originally From – The Epoch Times

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Microsoft shares lead on $60 billion buyback program
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