Microsoft Common Stock Split
Effective March 29, 1999
January 25, 1999 stock split announcement
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.
Heres 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 investors 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 investors 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
The decision to split the stock was made
by Microsofts 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
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
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 Companys 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
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
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
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
How do I contact the Stock Transfer
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 (Microsofts Stock Transfer Agent) by:
- Email: email@example.com
- Phone: (800) 285-7772
- Address: ChaseMellon Shareholder
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
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
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
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
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 Microsofts 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 Microsofts 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
Microsoft Corporation's initial public offering was March 13, 1986.
||Sept. 18, 1987
||2 for 1
||Sept. 18- $114.50/
||April 12, 1990
||2 for 1
||June 26, 1991
||3 for 2
||June 12, 1992
||3 for 2
||May 20, 1994
||2 for 1
||December 6, 1996
||2 for 1
||February 20, 1998
||2 for 1
||March 26, 1999
||2 for 1
|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