Microsoft Sets Stock Split

Microsoft, whose shares having doubled over the past year, said Monday morning it will split its shares 2 for 1.

The date of record is March 12 and Microsoft will have about 5 billion shares outstanding, the company (MSFT) said in a release. This is the eighth time Microsoft has split its stock since it went public in March 1986.

The split comes just a week after the company topped the earnings estimate of even the most bullish analysts. Microsoft earned 73 cents a share. That was 14 cents more than the consensus estimate of analysts polled by First Call and compares to 42 cents a share in the same period last year. Sales increased 38 percent to $4.94 billion, buoyed by strong personal computer sales in the holiday season.

A stock split doesn't affect the fundamentals of a company, but tends to excite investors because the stock appears "cheaper". That was the case for Microsoft Monday morning, as shares added 3 1/2 to 159 3/4.

An investor who bought 100 shares of Microsoft when the stock went public in 1986 would now have 7,200 shares, or 14,400 after the coming stock split. If purchased at the opening day closing price of $28 a share, or $2,800, the stock would be worth nearly $1.2 million.

Company founder Bill Gates, who had 515.8 million shares of Microsoft stock as of September, has seen the value of his holdings rise to more than $82 billion. Gates also has substantial investments outside of the company.