Microsoft Corporation (MSFT) Board Losing Ballmer Could Mean More Cash for Shareholders

Microsoft Corporation (NASDAQ:MSFT)’s board lost Steve Ballmer on Tuesday, as the former CEO stepped down, citing concerns that he wouldn’t be able to devote enough time to the board in light of his recent purchase of the Los Angeles Clippers, and some of his other civic duties and interests. As was discussed on CNBC, the move could prove a boon for Microsoft Corporation (NASDAQ:MSFT) shareholders, who may have more influence over the board and its initiative to buy back shares.

Microsoft Corporation (MSFT) Giving Apple Inc. (AAPL) a Run for its ‘Patent Money’

“[...] I think it’s an opportunity to have these directors more engaged with shareholders, and I think shareholders are going to have more influence on the board. And one of the top priorities of shareholders has been not only change management, fix the strategy, reduce costs, it’s also return some of that cash to shareholders […],” said Rick Sherlund, U.S technology team head with Nomura Securities.

As Sherlund explained, both Ballmer and former chairman Bill Gates were conservative when it came to retaining cash, which Microsoft Corporation (NASDAQ:MSFT) is chock full of; the company has approximately $83 billion in cash, and could very comfortably buy back $10 billion or more in stock over the next few years.

If there is a dramatic shift in the culture of the board, it could become evident as early as mid-September, according to Sherlund, when the board meets to discuss the increase in their dividend. It’s possible the change could be seen this early to affect the dividend, though other issues related to strategy may take precedence at this early juncture.

Sherlund also pointed out that it may be seen as unseemly to increase shareholder cash in the midst of Microsoft Corporation (NASDAQ:MSFT)’s recent layoffs. Either way, he expects a bold move made by the board within the next year, which could positively influence Microsoft Corporation (NASDAQ:MSFT)’s shares, which are already up 35% since Satya Nadella took over as CEO in February.

Disclosure: none

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!