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   Frequently Asked Questions
Microsoft Common Stock Split
Effective March 29, 1999

January 25, 1999 stock split announcement press release

How does a 2-for-1 stock split actually work?

A 2-for-1 split means the investor will have twice as many shares as he had before, at half the market price.

Here’s an example:
As of the record date (March 12, 1999) if an investor owns 100 shares of MSFT and the market price is $150.00/share, that investor’s total value is $15,000.00. After the split, the investor will have 200 shares of stock, but the market price will be approximately $75.00/share. The investor’s total investment value in MSFT remains the same at $15,000.00 until the stock price moves up or down.

Why did you split the stock now?

The decision to split the stock was made by Microsoft’s Board of Directors, based on a desire to make our stock more accessible to a broader range of investors.

How many times have you split the stock?

This is the eighth time the company has split the stock since Microsoft went public back in March 1986. One original share will equal 144 shares after this split is effective. (See table at the end of this Q&A for detailed history of all splits.)

What is the effective date of the split?

There are several key dates.

  • The Record Date for Special Shareholder Meeting – January 29, 1999 – determines which shareholders were entitled to vote at the Special Shareholder Meeting;
  • The Special Shareholder Meeting – March 12, 1999 – to approve an increase in the Company’s authorized common stock to permit consummation of this stock split;
  • The Record Date - March 12, 1999 - determines which shareholders are entitled to receive additional shares due to the split;
  • The Mailing or Payment Date - March 26, 1999 - is the date when holders of record or brokers are mailed notification of the shares subject to split; and
  • The Ex-split Date - March 29, 1999 - is the date when Microsoft common shares will trade on Nasdaq at the new split-adjusted price.

When was the Shareholder Meeting held to approve the stock split?

The Special Shareholder meeting was held on March 12, 1999. The proposal passed which amends Microsoft's articles of incorporation to increase the number of authorized shares to accommodate the stock split. You can view the transcript of the meeting here.

What is the record date for receipt of the stock split?

March 12, 1999. If you own common shares on the record date, your shares will be subject to the stock split.

What is the mailing date for split shares?

March 26, 1999. This is the date ChaseMellon Shareholder Services, (our stock transfer agent), mails written notice to registered common shareholders indicating their split-adjusted share amounts.

What is the payable date?

March 26, 1999. This is the same as the mailing date. This is the date when ChaseMellon Shareholder Services, (our stock transfer agent), mails written notice to shareholders indicating their split-adjusted share amounts.

What is the Ex-date?

This is also referred to as the "ex-split date". It is March 29, 1999, which is the date Microsoft common stock will begin trading at its split-adjusted price on the Nasdaq stock market.

Why was Microsoft seeking authorization for 12 billion shares when just 5 billion were needed to accomplish the 2-for-1 stock split?

Before shareholders approved the increase of authorized shares and before the split was effective, Microsoft had 2.5 billion shares issued and outstanding with 4 billion shares authorized for issuance, i.e. 1.5 billion shares available for future issuance. Shareholders approved the increase in the number of authorized shares, so issued and outstanding shares increased to just over 5 billion and the number of authorized shares increased to 12 billion.

The increase in the number of authorized shares allowed for the proposed 2-for-1 stock split and will provide Microsoft with adequate flexibility in the future. These additional authorized shares may be used for: normal business transactions such as acquisitions; issuance of shares under the Company's stock option, stock purchase, and other existing employee benefit plans; or for possible future stock splits.

Mailing/Transfer Agent Details:

How do I contact the Stock Transfer Agent?

If you have any questions about:

  • Change of address
  • Lost stock certificates
  • Transfer of stock to another person
  • Additional administrative services

You can reach ChaseMellon Shareholder Services (Microsoft’s Stock Transfer Agent) by:

  • Email: msft@chasemellon.com
  • Phone: (800) 285-7772
  • Address:  ChaseMellon Shareholder Services
    P.O. Box 3332
    South Hackensack, NJ 07606-1916

Who mails the split shares?

Our stock transfer agent, ChaseMellon Shareholder Services, mails written notice to registered shareholders indicating their split-adjusted shares. If your stock is currently held in a brokerage account, the information will be sent directly to your broker.

When will the split shares be mailed?

New certificates will only be mailed upon request. ChaseMellon mailed written notice to shareholders of record indicating their revised shareholdings on March 26, 1999 but you will not automatically receive share certificates. Most records of these types of transactions are now kept in a paperless fashion, so if you require physical stock certificates, you will need to make a special request. If your stock is currently held in a brokerage account, the information will be sent directly to your broker.

Where will my shares be mailed?

If you currently hold stock in your name, you will be notified at the address ChaseMellon, our stock transfer agent, has on file. To verify your address you can call ChaseMellon directly at (800) 285-7772, selection 4. If your stock is currently held in a brokerage account, the information will be sent directly to your broker.

What happens if I sell my shares after the record date and before the mailing/payable date?

From the record date to the mailing date, two separate markets exist for Microsoft common stock on the Nasdaq Stock Market. The "regular way" market, reported under the Company's normal MSFT symbol, continues to trade at the higher, pre-split price. Since sellers in the "regular way" market will receive full value for the shares they sell, they are not entitled to the split shares they will receive by virtue of their being holders on the record date, so they transfer their rights to the split shares to their buyers by means of "due bills."

Nasdaq recognizes that stockholders might alternatively want to sell only the "new" split shares while retaining the old shares, and this is accomplished by creating a "when issued" market at the post-split price. "When issued" trading is reported under the Company's normal Nasdaq symbol with a "V" appended, that is, MSFTV. "When issued" trading ceases on the mailing date.

Will there be a "when issued" market for the split shares?

It is expected that the Nasdaq Stock Market will authorize a "when issued" market for the new split shares under the MSFTV symbol. This will occur only between the March 12 Record and March 26 Payable/Mailing Dates. Trading in the when issued market will reflect the anticipated split value of Microsoft shares. Settlement of "when issued" trades is expected to occur on March 31,1999 (fixed by Nasdaq; normally third business day after mailing date); three business days after the Payable/Mailing Date. Microsoft has no involvement in when-issued trading. You should check with your broker if you are interested in when-issued trading.

What is the impact on the Microsoft preferred stock - is that splitting too?

No, we are not announcing a split on the preferred shares. There is no impact on the preferred stock other than the conversion ratio. (The conversion ratio represents the number of common shares a preferred shareholder is eligible to receive under certain circumstances - see scenario 3 below.)

The preferred stock conversion date, or the date the preferred stock will cease to exist, is December 15, 1999, which is less than one year away. There are 3 possible scenarios after the split in the common stock becomes effective March 29, 1999:

Scenario 1:  On December 15, 1999, if the price of Microsoft common stock (MSFT) is above $25.56 per share, each preferred shareholder will either receive $102.24 in MSFT shares, or $102.24 in cash, at Microsoft’s option.

Scenario 2:  On December 15, 1999, if the price of Microsoft common stock (MSFT) is below $19.97 per share, each preferred shareholder will either receive $79.875 in MSFT shares, or $79.875 in cash, at Microsoft’s option.

Scenario 3:  On December 15, 1999, if the price of Microsoft common stock (MSFT) is between $25.56 and $19.97 per share, each preferred shareholder will either receive 4 common shares for every 1 preferred share owned, or an equivalent amount in cash, at Microsoft's option.

 

History of Microsoft Common Stock Splits
Microsoft Corporation's initial public offering was March 13, 1986.
Split Payable Date Type Closing Price
before/after

First Sept. 18, 1987 2 for 1 Sept. 18- $114.50/
Sept. 21-$53.50

Second April 12, 1990 2 for 1 April 12-$120.75/
April 16-$60.75

Third June 26, 1991 3 for 2 June 26-$100.75/
June 27-$68.00

Fourth June 12, 1992 3 for 2 June 12-$112.50/
June 15-$75.75

Fifth May 20, 1994 2 for 1 May 20-$97.75/
May 23-$50.63

Sixth December 6, 1996 2 for 1 December 6-$152.875/
December 9-$81.75

Seventh February 20, 1998 2 for 1 February 20-$155.13/
February 23-$81.63

Eighth March 26, 1999 2 for 1 March 26-$178.13/
March 29-$92.38

2 for 1 = One additional share for every share held
(multiply number by 2 for new total)
3 for 2 = One additional share for every two shares held
(multiply number by 1.5 for new total)

Microsoft common stock is traded on The Nasdaq Stock Market. Our ticker symbol is MSFT.

Last updated May 13, 1999

1999 Microsoft Corporation. All rights reserved. Terms of Use.