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Forums - Microsoft Discussion - Could Microsoft Purchase Square Enix???

dallas on 31 August 2007
Legend11 said:
dallas said:
Yes, MS's profits have been nice indeed, but MS has to divide this money among its divisions, and still leave enough for dividends but do you really think that Microsoft would allocate a much greater than normal amount to the X-box by the act of purchasing Square Enix?

Thirdly, MS has about $6.1 billion reserved in cash. A purchase of SE would take this down to zero or very close to it, so MS would have to go into debt to do this. Not only would MS have to pay a premium for a company that it couldn't strategically make much use of since its strongpoint in games is america which traditionally hasn't been that big on RPG's, but it would have to go into debt in order to do so thus defeating your argument.

Umm I really can't see Microsoft's cash reserves at $6.1 billion... I mean it was at $28.9 billion on April 1st, 2007 and it's extremely doubtful that they would have spent over $22 billion since then (They only spent $7 billion on aquisitions and capital expenditures over the past 5 years prior to that).

Also buying Square would not put Microsoft into debt but it would probably be a hard sell to their shareholders since it's not like Square Enix itself could ever generate the extra cash back (they'd likely only sell to Microsoft for some outrageous amount far above what they'd sell to Sony or Nintendo) and the company (Square Enix) would likely lose revenue if they became Xbox 360 exclusive (although since they're making DS and PSP games as well it likely wouldn't be that major of problem like it would have been when Microsoft originally tried to buy SquareSoft in 1999).


I'm not asking you to accept my opinion, rather I am only asking that you look the figures up and decide for yourself.  Go to this link showing microsoft's financial statements, and then look at its balance sheet, the cash portion of which specifically.  You will see that MS does indeed have about $6.1 billion in cash so yes, they would have to get financing for the deal which would most likely be debt.

http://www.microsoft.com/msft/earnings/FY07/earn_rel_q4_07.mspx



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AsylumX on 31 August 2007

I think Microsoft shareholder's won't be an issue... If Bill Gates and all his buddies at M$ know something about bussiness the would probably own at least 60% of M$ shares... so you don't have to ask for permission for doing something like that... besides... it's not that easy to buy "X" shares... first you have take into account if there is same sort of clause that prevents a hostile take over. For example, a really used clause in companies is that you cannot sell at free will your shares... you can only sell them back to the company or one of it shareholders with the approval of the company's board of directors...

Also is pointless to buy a company if you cannot guarantee that the people working there would stay after the take over. Is like buying a very expensive building full of computers with some papers which say that you could use "X" brand and the previous releases under that brand but without the people in order to make that happen.

If buying companies would be that easy, M$ or other multi-billon dolar company would start buying every company around the globe in other to control every single thing that its sold on earth... and they would earn so much money that the would need 5 lives in order to spend 1% of that money...



jhlennon1 on 31 August 2007

S-E needs to be up for sale in order for MS to purchase, so no. MS, strictly talking money, can purchase most companies.



Legend11 on 31 August 2007
dallas said:
Legend11 said:
dallas said:
Yes, MS's profits have been nice indeed, but MS has to divide this money among its divisions, and still leave enough for dividends but do you really think that Microsoft would allocate a much greater than normal amount to the X-box by the act of purchasing Square Enix?

Thirdly, MS has about $6.1 billion reserved in cash. A purchase of SE would take this down to zero or very close to it, so MS would have to go into debt to do this. Not only would MS have to pay a premium for a company that it couldn't strategically make much use of since its strongpoint in games is america which traditionally hasn't been that big on RPG's, but it would have to go into debt in order to do so thus defeating your argument.

Umm I really can't see Microsoft's cash reserves at $6.1 billion... I mean it was at $28.9 billion on April 1st, 2007 and it's extremely doubtful that they would have spent over $22 billion since then (They only spent $7 billion on aquisitions and capital expenditures over the past 5 years prior to that).

Also buying Square would not put Microsoft into debt but it would probably be a hard sell to their shareholders since it's not like Square Enix itself could ever generate the extra cash back (they'd likely only sell to Microsoft for some outrageous amount far above what they'd sell to Sony or Nintendo) and the company (Square Enix) would likely lose revenue if they became Xbox 360 exclusive (although since they're making DS and PSP games as well it likely wouldn't be that major of problem like it would have been when Microsoft originally tried to buy SquareSoft in 1999).


I'm not asking you to accept my opinion, rather I am only asking that you look the figures up and decide for yourself.  Go to this link showing microsoft's financial statements, and then look at its balance sheet, the cash portion of which specifically.  You will see that MS does indeed have about $6.1 billion in cash so yes, they would have to get financing for the deal which would most likely be debt.

http://www.microsoft.com/msft/earnings/FY07/earn_rel_q4_07.mspx


According to the balance sheet you linked to they have $23.41 billion in cash reserves as of June 30th, 2007.  They have $17.3 billion of that in short term investments meaning they invested the money but will be getting it back in less than one year.

Edit: Oops when you said "reserved in cash" I thought you meant cash reserves, so I guess that's where the confusion comes from.



footbag on 31 August 2007

[Enter dreamy state with harp music...]

Maria Bartaromo on CNBC:
Microsoft will be buying Square Enix some time during the first quarter of 2008. They will purchase some 53% of the stock at a premium of $5 or 33 a share. The deal will cost $2.1 billion. Their plans are to use the brand to fuel the growth of their 360 console. Expect FF branded 360's as well as a huge Windows MMO launch. They have intentions of discontinuing any future PS releases, as well as requiring all future developers of FF product to complain about the difficulty of programming for the PS3. They will still be producing games for the Wii, word on the street is that Bill Gates kids cannot get enough of the bowling game.

[Exit dreamy state...]

Sigh. and wait for the rumors to fly!



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starcraft on 01 September 2007
dallas said:
 

I'm not asking you to accept my opinion, rather I am only asking that you look the figures up and decide for yourself. Go to this link showing microsoft's financial statements, and then look at its balance sheet, the cash portion of which specifically. You will see that MS does indeed have about $6.1 billion in cash so yes, they would have to get financing for the deal which would most likely be debt.

http://www.microsoft.com/msft/earnings/FY07/earn_rel_q4_07.mspx

They also have $27billion in short term investments and total "current" assets of around $50 billion, using the link you just provided.  "Current" assets, especially short-term investments are highly liquid, meaning they can quickly be turned into cash. 

Microsofts divisions are all fully funded and their Vista operating system and Office 2007 are now in the EARNING stage of the product-life-cycle.  What that means is that the majority of expenses associated with these products (MS's largest and most profitable ones) are ALREADY PAID.

Pick up an economics text book and have a quick read.  The only thing that could stop MS from purchasing SE is shareholder politics and a belief that it isnt neccessary, NOT FINANCE. 

 



starcraft - Playing Games = FUN, Talking about Games = SERIOUS

Dolla Dolla on 01 September 2007
Soriku said:
Diomedes1976 said:
You cant buy something that isnt in sale .There may be some thousands of shares on the market for the people to buy but most probably the current direction has big enough core percentage under control to avoid hostile takeovers .

Plus ,Sony has a share of Square Enix .

 

MADE UP STUFF FTW! Lol, that's not true. At all.

It's not made up. Sony is a principal shareholder in Square Enix stock. They own about 8%, if I'm not mistaken.

Edit: Post 1800 *_*



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Tag: "I have tasted Obi-Wan's bitter tears"

steven787 on 01 September 2007

I don't think they will, but to add a couple things about buy out and company control:

Even if MS didn't have the cash, they can buy on credit, like Gamestop bought EB with credit.

Even if they could only get their hands on 30 or 40% of S-E, that would still basically put them in control. They would have to negotiate board members, but they could basically keep out anyone they didn't want.



I would cite regulation, but I know you will simply ignore it.

Legend11 on 01 September 2007
Dolla Dolla said:
Soriku said:
Diomedes1976 said:
You cant buy something that isnt in sale .There may be some thousands of shares on the market for the people to buy but most probably the current direction has big enough core percentage under control to avoid hostile takeovers .

Plus ,Sony has a share of Square Enix .

 

MADE UP STUFF FTW! Lol, that's not true. At all.

It's not made up. Sony is a principal shareholder in Square Enix stock. They own about 8%, if I'm not mistaken.


You probably just blew Soriku's mind with that info.



Ari_Gold on 01 September 2007

mehhh @ square-enix... go ATLUS!!!