Re:Microsoft to lay off 11,000 employees
by mgkimsal on Tuesday January 17, 2023 @03:31PM
(#34418479)
I had seen someplace else that there's... $107b as of last quarter, but it was down 17% from year before same quarter, so yeah, it's draining some. But are they really putting $70b down in cash for Activision?
> But are they really putting $70b down in cash for Activision?
Yes it's all cash.
https://news.microsoft.com/2022/01/18/microsoft-to-acquire-a...
Re:Microsoft to lay off 11,000 employees
by KptMarchewa on Tuesday January 17, 2023 @03:46PM
(#34418768)
I really, really doubt that acquisition is 100% cash.
Re:Microsoft to lay off 11,000 employees
by CamelCaseName on Tuesday January 17, 2023 @04:12PM
(#34419214)
It is all cash.
> As announced on January 18, 2022, Microsoft plans to acquire Activision Blizzard for $95.00 per share in an all-cash transaction.
https://www.businesswire.com/news/home/20230111005882/en/Act...
Re:Microsoft to lay off 11,000 employees
by Kon-Peki on Tuesday January 17, 2023 @04:59PM
(#34419985)
In this context, "all-cash transaction" means that the Activision shareholders get cash for their shares and not some combination of cash and MSFT shares.
Where and how MS got that cash is not being addressed.
Re:Microsoft to lay off 11,000 employees
by KptMarchewa on Wednesday January 18, 2023 @04:29PM
(#34433367)
Interesting. Still, large parts of that cash could be financed. I doubt Microsoft would just spend 70% of their war chest on a single transaction like this.
Re:Microsoft to lay off 11,000 employees
by HillRat on Tuesday January 17, 2023 @04:47PM
(#34419806)
They haven't said so yet -- perhaps they'll clarify on the call tomorrow -- but they'll probably take down new debt to make this happen; it's a good time to go to the markets, and a lot of their cash is parked overseas. Fitch recently announced they're withdrawing their ratings for MSFT debt, so that's probably an indication they expect a significant amount of the purchase price to come from new issuances.
Fwiw, unless cash on hand already accounts for it (I don't think it does), then $70B of that is tied up in the Activision acquisition. Thus we really only have $30B cash on hand, which in a higher than previous interest rate environment is probably not great (though afaict Apple has $48B). Likewise, our cash on hand has been drastically dwindling the last few years, making the $30B total seem a bit more precarious.
I have suspicions that the Activision acquisition is a huge part of the hiring freeze at Microsoft and the source of a lot of budget concerns and constraints. It's pretty frustrating watching all the freezes seemingly because of this one acquisition (as an employee without any inside knowledge about this).