Microsoft announces stock split, investment
Shares of Microsoft jump higher in morning trading after the company announces a two-for-one stock split and a $500 million investment in a British cable operator.
The software giant hopes that its investment in NTL will help to accelerate the development of new, broadband services, including high-speed voice, video, and data services to customers in the United Kingdom and Ireland. But more importantly, the move may give the company entry into the United Kingdom's high-speed cable market.
NTL is Britain's No. 3 cable operator and a new-entrant local telecommunications competitor, with more than 1.4 million telephone, cable television, and Internet customers.
Hoping to make its stock more affordable to individual investors, Microsoft announced that its board of directors has approved a two-for-one split of its common shares.
The software giant said that its stock split is still subject to approval by the company's shareholders. If approved, shareholders will receive one additional common share for every share held on the record date of March 12, 1999.
At the same time as the company continues to post stellar earnings and sees its stock marching higher, it faces harsh criticism in the landmark antitrust suit filed against it by the Justice Department and attorneys general from 19 states.
Shares of Microsoft edged 3.04 percent higher to 161 in morning trading, and have reached as high as 167.75 and low 67.66 as during the past 52 weeks.
"Microsoft works to make our technologies broadly accessible to customers. Similarly, we aim to make our stock broadly accessible to individuals and this stock split should help achieve that objective," Gregory B. Maffei, the company's chief financial officer, said in a statement.
As of December 31, 1998, Microsoft had approximately 2.5 billion common shares outstanding. Upon completion of the split, the number will increase to approximately 5 billion. This is the eighth time the common stock has split since the company went public on March 13, 1986.
"We're gratified that customers find our products compelling and innovative, and have rewarded the company and our shareholders with a strong stock price," said Maffei.