Microsoft has announced a $3bn dividend cut, but analysts said the company’s decision was largely driven by a sharp reduction in its stake in Microsoft’s cloud business.
The company also cut $1.7 billion in its dividends in 2016, making it the biggest dividend cut in the company ever.
The dividend cut is the latest in a string of dividend increases for the company, which was valued at $4.5bn when it was founded in 1997.
The Microsoft dividend was cut by $3billion, to $1 per share, in a deal announced on Friday.
Microsoft was founded by Bill Gates in 1997, with the vision of a software company that would revolutionise the way people work.
The deal is the first for the Redmond, Washington-based software company, and comes just two months after the US government agreed to help finance Microsoft’s planned acquisition of Nokia’s mobile phone business.
But the news of the cut comes a day after Microsoft confirmed it had raised $2bn in cash, and said it had secured another $1bn in financing.
It said that the cash had come from a series of capital raise deals, including a $1 billion share buyback program, and $1 in additional financing.
“We are pleased to announce the latest round of dividend payments, and the addition of additional funding for the future,” said Bill Gates, co-founder of Microsoft.
Microsoft has raised nearly $3tn in cash and shares since 1998. “
This new round of capital will enable us to further grow the company in the future and accelerate our progress towards delivering the next generation of Microsoft products.”
Microsoft has raised nearly $3tn in cash and shares since 1998.
Its stock has grown in value by almost 100 per cent in the past decade, but has suffered in recent months from a number of bad investments and a slump in the cloud computing industry.
It is expected to report its first quarterly earnings before tax results in March.
Microsoft shares were down more than 1 per cent at $37.50 in after-hours trading. ®