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Bill Gates on track to own no Microsoft stock in four years
- cs702 12y agoThe billion-dollar question is, of course, why is Gates selling? He personally doesn't need to sell so much stock -- he's already got enough cash at hand. The Bill & Melinda Gates Foundation doesn't need it either -- it's endowment is currently $40.2 billion (i.e., that's how much cash & investments it has available for grants), and it's giving away "only" $3.4 billion a year, so it won't need new cash injections anytime soon.[1] If Gates believes Microsoft's stock is a good long-term investment, he (and the foundation) would be better off if he were to hold on to the stock and sell it for a lot more in coming years. Something doesn't add up. Perhaps this wasn't a "sale" of stock in the ordinary sense, but some kind of transfer of stock ownership to the foundation's endowment? -- [1] http://www.gatesfoundation.org/Who-We-Are/General-Information/Foundation-Factsheet http://www.gatesfoundation.org/Who-We-Are/General-Informatio...
- jimktrains2 12y agoI thought the amount in the endowment wasn't supposed to be touched and that the interest/dividends on it were what was used for day-to-day operations.
- hnnewguy 12y ago>why is Gates selling? Diversification? I don't see the point in remaining one of the largest shareholders in a single company, especially if you're not going to take an active role. >Perhaps this wasn't a "sale" of stock in the ordinary sense He's been selling his stock for years, I believe.
- pflats 12y agoI agree. The article explains exactly that in the second sentence: "Gates […] has sold 20 million shares each quarter for most of the last dozen years under a pre-set trading plan." This isn't a former CEO getting out while the getting's good, this is a guy who's been consistently diversifying his portfolio for over a decade. Either he thought MSFT was a bad long-term investment back in 2002 (which seems unlikely; Windows XP just hit the market doing gangbusters) or he thought that having the entirety of his fortune tied up in a single company is dangerous. He still has 330 million shares in MSFT. At around $40/share, that's still $13 billion. If he sells 300 million more shares (91% of his remaining holdings), he'll still have around a billion bucks invested in Microsoft. He's a rich dude, but it's still a billion dollars! He also has the advantage of being Bill Gates. Barring any catastrophic mistake on his part, he'll always be able to influence Microsoft, even if he isn't anywhere near their biggest shareholder.
- webreac 12y agoOne day, MSFT will become a bad long-term investment. Selling regurlarly is a good way to disengage without triggering any panic among shareholders. I do not like the man, but Bill Gates has always been very clever for business. BTW, I wish the best to Satya Nadella.
- philliphaydon 12y agoIn 2014, how can you not like Bill Gates. He's a far better person than Steve Jobs ever was. He's making the world a better place.
- culturestate 12y agoThis is such a tired meme. They both made bad choices and were both, at various points in time, equally reviled. Gates has simply had the time and inclination to rehabilitate his image in public through an impressive array of charitable works - we don't need to continuously harp on Jobs just because he's dead now and will never have that chance.
- webreac 12y agoI have finished my studies in 1993. I have seen all the innovation between 1982 and 1990 (Commodore, Amstrad, Oric, ZX, Turbo Pascal, ...) and how Bill Gates has killed software I was using (Stacker, dr dos, gem, ...). I think he has contributed to slow down innovation by his monopolistic tactics (windows undocumented, ...). Microsoft bad behaviour has been clearly demonstrated in trials. I think that the current wave of innovation does not owe anything to Microsoft. Now, he may be another man, I do not know, but I know what he did to computer science.
- ceejayoz 12y agoA bigger endowment means the Foundation can give away more annually. $3.4B/year is a lot of money, but I'm sure they can think of more projects they'd like to do with twice that annually.
- dbg31415 12y agoHe'll probably want to keep a few shares -- now that Balmer isn't the CEO company has a shot of getting back on track.
- comlonq 12y agoYour comment is based on absolutely nothing aside from a little Balmer bashing. It's unlikely that he's selling because he thinks MSFT will under-perform, he's selling because he doesn't want the stock anymore therefore Balmer being replaced as CEO is unlikely to be an influencing factor.
- dbg31415 12y agoAugust 23rd, Microsoft announce Balmer's departure. http://www.microsoft.com/en-us/news/press/2013/aug13/08-23announcementpr.aspx http://www.microsoft.com/en-us/news/press/2013/aug13/08-23an... Stock is up over 25% since then. http://www.google.com/finance?q=NASDAQ:MSFT http://www.google.com/finance?q=NASDAQ:MSFT I'd say there are some other people who agree with me that Balmer probably wasn't the right fit, and certainly overstayed his welcome.
- amirmc 12y agoMany things have happened since Aug 23rd that could affect the stock price. It's ridiculous to claim that such a change over such a timespan is due to only one event.
- comlonq 12y agoI'm not arguing about Balmer, I'm saying that Bill's decision is probably nothing to do with Balmer or the state of the company. Why don't you re-read my original comment? Here; I've highlighted the key parts for you: " he's selling because he doesn't want the stock anymore therefore Balmer being replaced as CEO is unlikely to be an influencing factor."
- nmrm 12y agoIt's more likely this is simply diversification away from huge holdings of a stock that can change (up or down) by 25% in such a short period of time. All the eggs in one basket and all that.
- sjwright 12y agoWhether Gates owns Microsoft stock is of little relevance to either Gates or Microsoft. He's clearly not selling because he needs the money; he's selling because eventually he (or indeed his philanthropic foundation) will have more use for cash than MSFT shares. As the article says, he is selling the stock progressively. I know very little about stock market strategy, but presumably this is the most effective way to divest without flooding the market, shocking the market, sending signals, prompting investigations of financial impropriety, etc.
- icantthinkofone 12y ago"He's clearly not selling because he needs the money; he's selling because eventually he ... have more use for cash than MSFT shares." So, iow, he wants the money.
- dopamean 12y agoneeds vs wants
- deleted 12y ago[deleted]
- eddieroger 12y agoMicrosoft is doomed! Surely if anyone knows a good reason to sell of shares, it's the founder! Or, more realistically, Gates thinks his money is more worthwhile as cash than stock. It would be much easier for him to leave his philanthropic legacy a pile of cash instead of shares in Microsoft, so he's probably just shifting that balance now.
- bpicolo 12y agoHe's not going to hold it as cash, it's going to be held as more diversified investments. He wants his foundation to far outlive himself.
- abelsson 12y agoNo, the plan is to wind down the foundation within 20 years of his and Melinda's deaths. See http://en.wikipedia.org/wiki/Bill_%26_Melinda_Gates_Foundation#Lifespan http://en.wikipedia.org/wiki/Bill_%26_Melinda_Gates_Foundati...
- nickstinemates 12y agoMy favorite section is actually the Criticisms. I find myself finding ways mentally to dismiss them, because of the massive good the foundation is doing.
- rdl 12y agoThat could still easily be 50-70 years.
- higherpurpose 12y agoMaybe he doesn't think Microsoft will do very well in the future, something I also believe. Both Windows and Office will become almost completely commoditized in the future, by Android and iOS. This has already started with Microsoft starting to offer free versions of Windows for some type of devices, on which they make no money. It's just a matter of time before this happens to most of their market segments (except enterprise, where I expect them to keep selling Office and Windows for quite a while).
- sjwright 12y agoOr maybe because he doesn't expect doctors fighting malaria to receive their paycheck through NASDAQ.
- fozzieBoston 12y agoMicrosoft's revenue and net income has been growing over the past years, so while the media is happy to declare it dead, it is still in a good, health position.
- mertd 12y agoIf he were to invest his entire net worth on SP500, he would own about 45M shares of MSFT. So, relatively, he still has a lot of MSFT.
- brosephius 12y agoI know he has an investment vehicle of some kind to manage his wealth (I think it's called Cascade?) but does anybody know what it has stakes in? And his quoted wealth figure doesn't include what he's given to his foundation, right? I just think it's pretty amazing that he's still #1 or 2 on the richest list given how little he owns of Microsoft and how much he's given away.
- bpicolo 12y agoIt most likely consists of shares in far too many things to list. The amount of his money in MSFT doesn't matter unless MSFT outperforms the rest of his investments, no?
- patja 12y agoCascade is in Kirkland. I've heard they have around 100 employees. In addition to managing Bill Gates' portfolio, they also manage the portfolio of the Gates Foundation. They intentionally keep a very low profile.
- e2e8 12y agohttps://en.wikipedia.org/wiki/Cascade_Investments_LLC https://en.wikipedia.org/wiki/Cascade_Investments_LLC
- raheemm 12y agoMost founders have a sense of entitlement to their companies and understandably so. In fact, it becomes a generational entitlement, as can be seen with family businesses and family fortunes. Gates displays advanced thinking in divesting his entire ownership. I imagine it must have been a difficult decision to let go so completely. This is admirable.
- sjwright 12y agoHe hasn't sold it all yet; for all we know he might have instructions to retain one percent. Or π percent. Bill is always going to have some spiritual importance to Microsoft, whether he owns 4%, 1% or a single share certificate elegantly framed for his bathroom wall.
- fozzieBoston 12y agoYou do realize it says: "Assuming no change to that pattern". Can't Reuters apply that analysis to any event and extrapolate "reportable" results? Some examples: - assuming no change to the Facebook user acquisition pattern, it will reach over 20B users in several years - assuming no change to the growth of a company, it will become larger than the market in 5 years
- frandroid 12y agoIt's much easier to make reasonable assumptions about a pattern that is intentional and easily executable upon, such as regularly selling stock one already owns. User acquisition, on the other hand, depends on many variables out of one's control. Also, people use something called critical thinking, e.g. Facebook can't attract more customers than there are humans, something you will find useful as well.
- paul_f 12y agoIf you're ever in this position, and you own a massive chunk of a highly liquid stock, I have one word for you ... diversify
- colinbartlett 12y agoGood advice. For me, it's hard to imagine the world's richest man isn't already pretty diversified.
- mgkimsal 12y agoAt some point, the point of diversification doesn't hold a lot of value any more. You typically diversify to protect your assets/principal/etc. There's little that could happen on the world markets to obliterate Gates' wealth to the point where "diversification" would have had a substantially different impact on him and his family.
- chiph 12y agoNo comments about how Paul Allen has been doing the same thing?
- thom 12y agoSci-fi memorabilia doesn't buy itself.
- icantthinkofone 12y agoAccording to some stories, Ballmer now owns more stock than Gates. I'm wondering if Ballmer will start selling off his stock and how investors will react to that.
- igravious 12y agoIndeed. Strangely enough, one of those some is this very one. "According to documents filed with the U.S. Securities and Exchange Commission on Friday, Gates now owns just over 330 million Microsoft shares after the sales this week. Ballmer owns just over 333 million, according to Thomson Reuters data."
- kyleblarson 12y agoHere are his most recent sales. To quote Chazz Michael Michaels, the amounts are mind bottling: http://biz.yahoo.com/t/38/567.html http://biz.yahoo.com/t/38/567.html
- spiritplumber 12y agohttp://xkcd.com/605/ http://xkcd.com/605/ I'd like to point out that extrapolating like this is silly.
- gwern 12y agoI don't think you read the article. "Gates […] has sold 20 million shares each quarter for most of the last dozen years under a pre-set trading plan."
- spiritplumber 12y agoI have. It still looks like linear extrapolation, for a very complex system (the mind of a very smart human being).
- gwern 12y ago"a pre-set trading plan".
- samspenc 12y agoMaybe a dumb question - if he only owns 330 million shares ($13 billion net worth), how is he worth $77 billion? That's quite a bit of a difference...