Microsoft (MSFT) Needs To Use Its Cash To Buy Out Bill Gates

There has been all type of speculation about what Microsoft (Nasdaq: MSFT) will do with the $3.75 billion they just raised in their first ever bond offering. Many thought the offering was strange because Microsoft already has a cash hoard of more than $25 billion.

In the preliminary prospectus Microsoft said it will use the funds from the offering for working capital, capital expenditures, repurchase of their capital stock or acquisitions. Much of the speculation so far has centered on the 'acquisitions" comment, with rumors floating that MSFT could buy Yahoo! (Nasdaq: YHOO) or SAP (NYSE: SAP). But what about a "repurchase" - a BIG repurchase? Specifically a repurchase from none other than Bill Gates!

Mr. Gates has been blasting out of his MSFT stock left and right. In fact, Gates has sold 14 million shares since April 29th. That's about $280 million dollars worth of stock! Gates' selling is a major overhang on the stock. He clearly wants out so he can work on his philanthropic efforts.

Gates has about 740 million shares of MSFT left. It would cost the company about $15 billion to buy out the rest of Mr. Gates holdings. Microsoft clearly has the money. It could be a smart move for the MSFT shareholders to buy Gates out partially or in full.

Of course if this was to happen, it would be an end of a era.

Get Real-Time Market Moving News Two-Weeks FREE http://www.streetinsider.com/premium_content.php

You May Also Be Interested In

• Nscale targets up to $3B in US IPO as soon as September - Bloomberg
• The Hardest Part of Quantum-Proofing a Company Isn't the Encryption. It's Deciding Where to Start
• D.E. Shaw owns $1B+ stake in Sysco - Reuters