But Mr. Einhorn, What About Microsoft Corporation (MSFT)?

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  • Oracle Corporation (NASDAQ:ORCL) is the third peer in this respectable group. The manufacturer of software for databases is sitting on $34 billion of cash, or $7 per share. On the one hand, Oracle is not an extreme example as Apple – ‘Only’ 20% of its share price is pure cash compared to over 30% in Apple. On the other hand though, Oracle seems to deploy its capital much more poorly than Apple. It’s always on a buying spree for expensive companies, it barely pays any dividend (a measly dividend yield of 0.7%) and it issues new shares at a staggering rate. Oracle practically begs for someone like Einhorn to act as the responsible adult around and transfer more of its cash to shareholders.

    The Fool looks ahead

    It’s still fairly early to say whether Einhorn’s initiative will spark a vast cry against other companies to start returning more cash to their shareholders in the form of dividends. But I certainly believe that this move towards unlocking value via dividends is a blessed initiative to corporate America.

    The article But Mr. Einhorn, What About Microsoft? originally appeared on Fool.com and is written by Shmulik Karpf.

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