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Ballmer Sells Part of his Stake in Microsoft
An anonymous reader writes "The Financial Times reports that Steve Ballmer has sold part of his MS shares (my early morning math isn't very good, it seems a shade under 10%). Short of cash? Parking tickets? Or the start of a strategy to get rid of it all without causing too much upset in one go? No idea, but speculation is sure to be with us for a while."
To whom has he sold this stock?
Is this a step towards some other interest group having a share of microsoft in exchange for a friendlier marketshare in some instances of power, foo example?
...and the time will have come. And the name shall be known... The Kylrathi Viper Clan.
It seems odd to me that a company that has so much cash and such high profit margins requires mandatory fast growth, but then I am a humble programmer, not a financial guy :-)
The whole idea goes against my basic philosophy of "take what you need and leave some for others". Not to go off on a huge tangent, but in the western world, greed seems to far outweigh issues like building an enjoyable and productive career. As Josepgh Campbell used to say "follow your bliss"...
That said, Balmer probably has some fun with Microsoft :-)
-Mark
That being said, I don't think Ballmer falls under the category of "low paid".
"We make our world significant by the courage of our questions and by the depth of our answers." Carl Sagan
At the company meeting last year, Balmer (memory is fuzzy) he's 47, and plans to return in 10 or 15 years (can't remember which) - I think 10. No Monkeyboy -- but he did play a song from his favorite Broadway play, some 70's wierd shit sounded like Hair or Jesus Christ Superstar. Instead of Monkeyboy or the usual miltary analogies, they played a bunch of videos where people talked about how they failed and what they learned from it -- it was a reaction to Enron/Worldcom "ethics"...
Important thing is Balmer is ten years and out. MS people are getting old -- I think average age is 35 now. Every great story has an ending...
Some interesting tidbits from a parallel article.
Ballmer has only dropped about 15% of his ownership in MS since his involvement with the company as compared to Gates and Allen who each own only 50% of their original stake.
Contrary to intution, MS shares actually rose as this occured, climbing 6 cents to close at 24.22 on Friday. MS had declined 7 of the last 9 trading sessions.
It seems that the public hasn't taken this as an indication that MS is going the way of the iLoo anytime soon.
So, Dubya signs a tax-cut which includes lots of short-term and long-term capitals gains cuts, and Ballmer suddenly decides to sell a lot of stock.
Gee, I wonder why.
For those speculating on other things, I think Ballmer, et. al. *KNOW* that the profitability of MS is eventually doomed, but can't think of a way of getting out big time without crashing the company. So, they sell off here, they sell off there, and do the standard "screw the employee, shareholders, and everybody else not part of the good-buddy club" routine.
Karma: Food Fight (Mostly affected by Date Plate).
Of course Ballmer wants to diversify. Microsoft stock isn't going anywhere fast (down or up). They are a large company that won't be doubling their revenue any time soon. Why have all your wealth in a stock that isn't likely to go up very much? Of course he can't say that so he says "diversify my portfolio"
Ballmer now sold 40 Million shares, compared to that Bill Gates sold 400 Million or about 40% of his shares in the last years.
If Gates and Ballmer don't know where MSFT-stock is headed, who does?
Microsoft is imploding. Pure and simple.
The combination of open source commoditization and open disgust by growing numbers of CIOs (esp. in governments) are probably viewed as leading indicators by the big fatso in Redmond.
Steve Magruder, Metro Foodist
All of the top brass at Microsoft regularly sell off parts of their shares. Gates has been doing it for years, at a relatively regular pace.
The thing is, most of the upper management of Microsoft that have been with the company from early on have most of their wealth in Microsoft shares. The problem is that they have to sell it off slowly or they wouldn't manage to get a decent price for it.
What's interesting about this particular sale is the timing of it (never mind that it's one of the largest insider stock sales ever). With MS stock price so low and the MS/SCO suit going so well, you'd think he'd see it as a good time to buy.
Diversifying is one thing, selling at a stupidly low price is quite another. So naturally enough, we're all wondering what Steve knows that we don't.
Have you got your LWN subscription yet?
Like it or not, Microsoft is overpriced. If I would take Microsoft's market capitalization (259 billion $) and put the money into low risk investments at 5% interest, I would make 259 * 0.05 = 12.95 billion in profits per year.
Microsoft makes only about 10 billion in profits, so it's severly overpriced, especially considering the fact that stocks are very risky.
Microsoft has just recently raised licensing costs (through Licensing 6.0) but does on the other hand give huge discounts to all major customers if they may go to Linux. I'd say that in the future there is not much room anymore to bleed their customers.
Actually Bill Gates used to own almost 50% as AFAIR. Now he holds about 11% ...
Which means he has gotten rid of almost 80% of his holdings.
Yahoo -> MSFT -> insider , looking at last year show an almost scary mass exodus...
What wasn't reported is that Gates sold half that amount, or 20M shares last month as well, and he does this ALOT. Look here
http://biz.yahoo.com/t/62/412.html
for a 2-year history.
I look for this to escalate as they go down. The tricky part for them is to try to keep it out of the media so everyone's pension fund managers don't catch on and deflate the stock price further.
I asked my broker at Merrill Lynch to purchase $15,000 in Microsoft stock, and he said they had been advised that Redhat, etc. will take over the server market in about 4 years, so he advised me not to purchase the Microsoft stock.
No. That is not the case. Diversification is a well regarded investment strategy regardless of how much of a sure thing something is. (disclaimer: I'm in no way implying that MSFT is a sure thing in any way, shape, or form).
It's the whole "don't put all your eggs in one basket" theory.
There is risk in everything. Even as a CEO, President, and director, you can only manage the risk, not completely avoid it.
His financial planner probably just got him to come to his senses in terms of his portfolio and his future. My guess is that we will see a new MS CEO in the next couple of years. Why? Just because that is what good companies do.
"If you want to improve, be content to be thought foolish and stupid." - Epictetus
Actually you can go to www.nasdaq.com, type in "msft" and look at the form 144 (intent to sell) and form 4 filings in near real time.
Point is Ballmer has not been a big seller. Gates is a consistent seller, but you will also notice of late that quite a few VPs with much smaller holdings are selling quite large stakes of stock relatively speaking.
Although it is generally a much better indicator when insiders buy (people sell for lots of reasons, not always because they think the company's prospects are poor) there has been a lot of activity right at the trough here. That does not seem to be a real sign of appreciation in the future does it? Even on a split adjusted basis Gates has been a big seller this year.
Personally, I would like to donkey-kick Ballmer squarely in the figs with a golf shoe. That aside, however, his selling of shares probably isn't some devious plot, he probably really is diversifying his portfolio, but not how you think of it. Since he's probably considering retirement soon, he's probably moving his money into fixed-income securities (bonds, etc). So maybe he's selling his shares of stock so that he can either better prepare himself for retirement, or maybe he's using the money to buy M$ debt. A side note: Incidentally, by ratcheting up M$ debt level with bonds, M$ could actually improve their financial position by selling debt--their Return on Equity would increase, as would several other financial analysis ratios...
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= Lost Sheep to Shepard, you got your ears on?
Less of a controlling share could be legally perceived as evidence that Gates and Ballmer are just "cogs in the machine". I'm no expert (and barely even slightly knowledgable), so I don't know if this theory has any merit.
perl -e 'print $i=pack(c5, (41*2), sqrt(7056), (unpack(c,H)-2), oct(115), 10)'
his is very big news. Perticularly if you follow the history of the PC buisness and MS. BAck in the end of the 80s balmer made a hugh personal gamble - he basicly mortgaged his house and took every lown he could get to buy as many MS shares as he could. HE BELIEVED IN THE COMPANY.
Now he is selling 10%?!
which means....
Quote: "I know if I had even a thousandth of his net worth you'd never see me in an office ever again. I'm sure all but a handful of sane people would say the same."
Ever wonder why there's a reason why he's rich and you're not?
We had a local little old lady who trundled about the place in rags with a shopping trolly, doing stuff like picking up cans and generally acting like a bag lady. One day she died, and a friend of mine who does a lot of stuff for the local Catholic church was one of two people tasked with sorting out her estate (she'd left everything to the local Catholic church).
She'd lived in a very old house in the middle of what is now very expensive real estate (but probably would have been twenty pounds a block when she bought). In the course of going through the house, these two men stumbled across caches of money here and there adding up to thirteen million dollars (AUD) in cash. This does not count any other assets at all. Evidently she continually felt poor, and continually responded by accumulating money.
I guess her house and land was worth an additional million or two, and a lot of her chattels were well-kept antiques which probably brought in another few million for their age value alone. Nothing was said about jewelery or investments. You and I might have trouble understanding why she or Ballmer act this way instead of hitting Phuket, DisneyWorld or Vegas, but a surprising number of people are like that, and a surprising percentage of those use that most cursed of justifications for whatever they do: "the end justfies the means" - or, to quote Daffy Duck, "Consequences? Schmonsequences! As long as I'm rich!"
In a way, I can relate to the "same tiny house" - if a house works for me, I see no reason to have to learn new paths to blunder through in the dark (e.g. when a child wakes up or nature calls), new dance steps to organise a meal in the kitchen, and so on. New for new's sake doesn't ring any bells for me. OTOH, my wife just froths at the mouth for "new" all the time. Between us, we strike a reasonable balance.
Got time? Spend some of it coding or testing
"Received shares of stock and sold it the same day" means that a company employee exercised options (which is how they received the stock) and then sold the stock. That's pretty normal -- in many cases, you wouldn't exercise your options UNLESS you were planning to sell the stock (or unless the options were about to expire) -- otherwise, you would continue to hold the options and not have to put up the cash to purchase the stock. (Also, there is a tax liability associated with the option exercise, so you often have to sell at least some of the stock to pay the tax.) The real question is, what made Mr. Johnson decide that this was a good time to exercise his options and sell the stock?