Report: Microsoft to Buy Back $20 Billion in Stock

According to a Bloomberg News report quoting a UBS analyst, Microsoft will soon buy back $20 billion of its own stock in order to jumpstart the share price, which has languished over the past decade. The buyback will occur over a three month period and the purchase amount is five times higher than anything attempted by the company before.

UBS analyst Heather Bellini told Bloomberg that she expects Microsoft to begin repurchasing stock by September or October. She made the pronouncement in a July 25 analyst note after meeting with officials from the software giant.

Microsoft's share price has fallen over 25 percent this year after remaining curiously unchanged for several years. This year's drop coincides with Microsoft aborted purchase of Internet giant Yahoo!, a project that consumed resources and time at both companies and had similarly devastating effects on both companies' stock. Bellini says that Microsoft stock is now trading at its lowest price-earnings ratio since the company went public 22 years ago.

Microsoft CFO Chris Liddle described Microsoft's stock woes as "incredibly frustrating" recently and said that a buyback "makes more sense now than it ever has." Bellini says Microsoft won't announce the buyback until it's completed.

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