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Microsoft Thinks Its Stock Is a Bargain

Microsoft's stock is not the high-flier it was throughout the late '80s and early '90s. Many investors earned their yachts, Porsches and retirement homes on the backs of this baby. And thousands of employees became Microsoft millionaires, driving the prices of homes in Redmond to near-Silicon Valley heights.

Since the tech crash of 2001, the stock has been stuck. Like a rocking chair, it's going nowhere. But Microsoft thinks its own company is a pretty good deal and is buying back $40 billion in shares. That's like buying a Yahoo's worth of stock. And that's on top of the $40 billion buyback already completed.

I'm no Wall Street whiz (and neither, apparently, are they), but this seems like a good long-term move. It acknowledges that Microsoft is now a mature, less volatile stock. It means there's stability and sound financial underpinnings. Oh, how I wish Steve Ballmer and Bill Gates had been running Lehman, AIG and Merrill Lynch!

During the tech crash in 2001, there were no federal bailouts -- and our business came through just fine. Investors (like you and me, I'm sure) who lost money took our lumps and went on. What lessons should we have learned from the tech bubble burst that we can apply to today's Wall Street meltdown? Thoughts welcome at dbarney@redmondmag.com.

Posted by Doug Barney on 09/23/2008 at 1:16 PM


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