A press release from the Microsoft Corporation says that the proceeds from the offering will be used for general corporate purposes, including funding for working capital, capital expenditures, share buybacks and potential future acquisitions.
The real move I can see here is probably that when the board of directors of Microsoft saw interest rates at such historically low levels in September 2008, they allowed the company to take on up to 6 billion in debt. It is a pretty good idea since the company has showed that it could generate very high returns for its shareholders at a very low price.
What I am not quite getting is that the company doesn’t really need the money. With 7 billion dollars in cash and 18 billion in short term investments that are very liquid, I wonder what an extra 3.75 billion would change in the investment strategy of the company to increase returns for shareholders.
Full Disclosure: The author does not have a position in MSFT.