Coffeehouse Thread

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Microsoft says "Gimme a Dolla" fool

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    Microsoft to sell debt; strong demand expected


    Microsoft goes into debt for the second time in it's history(first in 2009) at an APR of 0.95%


    The era of Bill Gates is officially over.

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    Hey Chris!

    Long time no see!

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    @PaoloM: Smiley


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    It can't be Chris, Chris knows the markets, he tells us so, he's even writing a souper seekrit trading program. So he'd know debt is cheap right now, and makes better sense than just keeping cash - which has it's own problems anyway

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    Uhh they've sold equities forever, what's wrong with having some bonds too?

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    Chris as in beer28? Is he still trolling these forums?

    Can't fail more than trying to have a submarine ride with your car.

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    I've been down on Microsoft for delivering a real turd for WP7, but this just makes great investment sense. The interest rates are pretty much at historic lows (nearly zero) so why not get some money now and pay it back with inflated money later. It's a huge win for them.

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    Corporate bond debt can be sold for 0.01% at any time. You simply have to have demand. The prime lending rate may effect people's willingness to accept the .95% APR. These are mostly institutional investments.

    The real difference between Equity and Debt is that Equity holders will be 100% wiped out in a restructuring or bankruptcy. Debt holders get to sell off the kitchen sink and user data to repay their loan in any bankruptcy scenario.

    The new bonds are supposed to mature in 2040, I say the company doesn't make it until then.

    Another difference between bond debt and equity is that the SEC awarded Microsoft the shares to sell. Equity was free for Microsoft, debt is not.

    I have noticed that since Bill Gates started cashing out all his MSFT shares the stock splits stopped. I don't think he expects any more dillution to float. He's a smart guy.

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