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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."
Microsoft said the sales were undertaken so that Mr Ballmer could diversify his financial interests.
my guess is that some of those interests may include this, this, and if he's lucky after all that, maybe this.
Mike
Sure, he's a billion dollars richer, but he's still got some 400 million shares. must be nice
Accountants!
Accountants!
NetInfo connection failed for server 127.0.0.1/local
Maybe he sells them to BG. Parking tickets? For wrong parking of an air-craft carrier?
-Is the meaning of life vanity, or is vanity the meaning of life?
Here's to hoping that the ship is about to sink...
Bush Lies Watch
...and bought RedHat. Here's to the future baby!
Of his ADHD problem?
More links for the video
"We make our world significant by the courage of our questions and by the depth of our answers." Carl Sagan
I !!! ::whoa, the stock is worth that?!::
LOVE !!
THIS !!
SELL !!!
YEEEAAAAHHHH !!!!
Vonal Declosion
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.
Like it or not, Microsoft is doing fine. They have good profits for the forseeable future. His claim that he just wants to diversify is completely plausible. I'm sure his portfolio is disproportionatelyMicrosoft.
Democracy Now! - your daily, uncensored, corporate-free
Geez. The guy is just diversifying his portfolio. He is the least diverse of all the software billionaires or Buffett.
Unfricking believable that this is actually a slashdot story.
I mean, come one. Isn't it amazing enough that he mades $12 billion or whatever on MSFT? Now, the implication of this being on slashdot is that this smells of some sort of bad omen for MS. It's a little late for that given that HE HAS $12 BILLION WORTH OF STOCK!!! (insert Sam Kinison "oh! oh! OooooH!" here)
"If you want to improve, be content to be thought foolish and stupid." - Epictetus
No....the seahawks are owned by paul allen
It seems odd to me that a company that has so much cash and such high profit margins requires mandatory fast growth, but then I am a humble programmer, not a financial guy :-)
The whole idea goes against my basic philosophy of "take what you need and leave some for others". Not to go off on a huge tangent, but in the western world, greed seems to far outweigh issues like building an enjoyable and productive career. As Josepgh Campbell used to say "follow your bliss"...
That said, Balmer probably has some fun with Microsoft :-)
-Mark
He's investing in the drug industry. Think about it:
a large market of people who have no choice but to buy your product, an army of goons with automatic weapons, the government in your hip-pocket, and all the Latina sex slaves you could want?
Hmm. Doesn't he already have all that at M$? Perhaps my theory is off.
He's probably begun reading Slashdot for his investment advice and now believes that .NET will soon fail.
Of course, Slashdot is riddled with Millionaires.
Amazing magic tricks
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
Information Wants To Be Mirrored
After getting access to the Windows source code, China has discovered and created exploits/backdors that will threaten any computer running windows. They have already hacked the Pentagon, and have downloaded the whole TIA database.
Ballmer knows this, and he is selling his stock to get cash enough to buy out a small tropical island, where he can hide while the DOJ and every luser on the planet marches on to Redmond, torches and pitchforks in hand.
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...
He finaly saw a Gnu/Linux desktop running.
Or the start of a strategy to get rid of it all without causing too much upset in one go
/. ?
.net just barely leaving the vaporware category to face more established Java (btw Java is not perfect but it was simply there first).
don't we all just wish so here on
actually all indications show that the current software business model cannot be sustained during the next decade, there are hardly any valuable commercial software without an equivalent open source nephew even if not so-ready today but it is promising (remember how Linux itself started?).
IBM, Oracle, and Microsoft are all stretching this business model to the maximum but the end is coming sooner or later, I think in the future the only valuable commodity in the IT business will be services not licensing commercial software or being so desperate and try to force people to license your IP (SCO).
lets take Microsoft case their revenue is earned mainly from bread & butter Office Suite being challenged by OpenOffice and the desktop which Linux is getting there fast, they are trying to grab a share of the enterprise market by promoting SQL Server 64-bit kicking against market titans like IBM and Oracle, and with
Add global reduction on IT spending to one Microsoft screwing there customers by outrageous license costs and terms and you get yourself a recipe for a loser.
It seems that "the road ahead" has a road block for Microsoft and they don't know "where do they want to go Tomorrow.
He had close to a half billion shares, and he sold 40 million of them.
It is a drop in the bucket of total MS shares, which yahoo shows as 9 billion shares (float).
Again, the entire story should be modded down as flamebait.
The next slashdot story on MS will be that someone got a bad piece of chicken at the MS employee cafeteria: "MS Attempts to Poison Employees to Avoid Layoffs"
"If you want to improve, be content to be thought foolish and stupid." - Epictetus
SCO's!
To whom has he sold this stock?
He probably doesn't know. His stock broker probably sold the stock to some other stock brokers. My guess is that they did that in a crowded place with a lot of people screaming, all buying or selling some stock too. Those places are called stock exchange, and they are a big part of any modern economy.
Is this a step towards some other interest group having a share of microsoft in exchange...
Typically one sell stock in exchange for cash. Typically one would either re-invest that cash in some other stock (this is called spreading the risk, or my like my grandmother used to say don't put all your eggs in the same basket), or maybe he spent the cash like on a new house (well a few houses !), a private jet, or whatever he felt like at the moment.
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).
Microsoft hitting rock bottom is more related to fantasy than anything else. A company with $40 Billion in the bank is essentially isolated from any kind of market failure, unless it's prolonged over five or so years. Microsoft could easily put everyone on vacation for a year, take a marginal stock hit, and then buy everything back. The company will still be there when everyone comes back, and still would be a good investment.
You think that I'm crazy, you should see this guy!
This is par for the course. All CEOs do it. This story just made it to /. since its Ballmer and, well, if he took a dump people would try and tie it back to MS being evil. Larry Augustin sold 100k shares a the end of February, nobody posted that. Matt Szulik sold 500k shares at the beginning of the year and Mcnealy sold almost 5 million in April. Nobody cared about those. Sorry folks, Ballmer just has a smart financial planner, this doesn't mean MS is doomed.
Yossarian!
--an unbreakable toy is useful for breaking other toys--
Steve Balmer diversifies into buying SCO Grou at their asking rpice of $1 billion..
News at 11
Don't Tread on OpenSource
Interest group?
Ballmer wanted to sell his stock. He would not have been able to sell it unless there existed a buyer. He most likely sold the shares through a brokerage, which would have done the following:
1) Filled any orders from its own customers that could be filled against Ballmer's order. The price charged to those customers would likely be a little bit higher than the price Ballmer wanted to sell it for, since there is typically a difference (called buy/sell spread) in the price to buy vs sell a share of the same stock. The brokerage would have likely determined the buy price for its customers based on the best price available anywhere in the market (this is typically a part of the agreement between a brokerage and its customers). The difference in price becomes brokerage profit.
2) Assuming that once all of the Brokerage's customers' orders had been filled there were still some of Ballmer's shares left over, the Brokerage might buy some of the shares itself (they are cheaper than market price, because of the avoidance of the buy/sell spread).
3) If there are any shares left, the brokerage would likely attempt to fill any orders submitted to the electronic trading system (a computerized system that matches buyers and sellers). Again, doing this allows the Brokerage to keep the spread.
4) The remaining shares would be sold to one or more market making firms. Market making firms (or "Market Makers") are in the business of owning positions in a variety of stocks and profit based on the buy/sell spread when shares are bought and sold. Incidentally, competetive forces between market makers keep the buy/sell spread small, since most brokerages will typically do business with the market maker offering the best price.
I've just described what would happen if Ballmer decided to sell a relatively small chunk of stock (small enough that some people might talk about it a bit, and it might even appear on Slashdot, but not large enough to cause a major market movement). Suppose Ballmer wanted to sell ALL of his Microsoft shares...
If Ballmer wanted to sell all of his shares, he might expect to be able to sell them for $22 per share (for example). Suppose the market realized that this was happening. Prices would likely fall as people considered the impact of a large sell off. Opportunistic investors would quickly sell their own shares, expecting the price to fall further, and would plan to buy the shares back later once the price had fallen (there are also a variety of speculative financial instruments that would simplify executing this kind of strategy). Ballmer would now be unable to liquidate his shares for a reasonable price, because once the market knows that he is determined to sell, he'll have lots of competition.
Obviously, this would never happen, because it would greatly diminish the benefit of Ballmer's decision to sell, and would dissuade him from making the decision.
To accomodate this situation, Ballmer's broker would attempt to arrange the transaction behind the scenes, without the use of all of the machinery described above. This would likely take the form of a few phone calls to the large trades desk at other brokerages. "Psst. If you have a client interested in a large trade of MSFT, I might be able to help". The advantage is to be secretive so as to avoid giving away information that would tip off the market, while still finding someone to sell the shares to.
The eventual price of the shares would probably fall significantly below the market price of the stock. Why? To put it simply, liquidity costs money. It is still cheaper to use this approach than to try to sell a massive number of shares on the open market.
So, Ballmer may have made a life changing decision to sell all of his shares, or he may just want to diversify a bit, but his best move is always to sell it in small chunks in order to get the best price possible for the shares. As you can see, liquidity costs money.
Amazing magic tricks
> No idea, but speculation is sure to be with us for a while."
None of which will take into consideration the possibility that he is simply diversifying his holdings as all financial advisors tell us to do. Do you have all your savings invested in your employer's stock?
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
He most likely sold the shares through a brokerage, which would have done the following:
1) Filled any orders from its own customers that could be filled against Ballmer's order. The price charged to those customers would likely be a little bit higher than the price Ballmer wanted to sell it for, since there is typically a difference (called buy/sell spread) in the price to buy vs sell a share of the same stock. The brokerage would have likely determined the buy price for its customers based on the best price available anywhere in the market (this is typically a part of the agreement between a brokerage and its customers). The difference in price becomes brokerage profit.
2) Assuming that once all of the Brokerage's customers' orders had been filled there were still some of Ballmer's shares left over, the Brokerage might buy some of the shares itself (they are cheaper than market price, because of the avoidance of the buy/sell spread).
3) If there are any shares left, the brokerage would likely attempt to fill any orders submitted to the electronic trading system (a computerized system that matches buyers and sellers). Again, doing this allows the Brokerage to keep the spread.
4) The remaining shares would be sold to one or more market making firms. Market making firms (or "Market Makers") are in the business of owning positions in a variety of stocks and profit based on the buy/sell spread when shares are bought and sold. Incidentally, competetive forces between market makers keep the buy/sell spread small, since most brokerages will typically do business with the market maker offering the best price.
I've just described what would happen if Ballmer decided to sell a relatively small chunk of stock (small enough that some people might talk about it a bit, and it might even appear on Slashdot, but not large enough to cause a major market movement). Suppose Ballmer wanted to sell ALL of his Microsoft shares...
If Ballmer wanted to sell all of his shares, he might expect to be able to sell them for $22 per share (for example). Suppose the market realized that this was happening. Prices would likely fall as people considered the impact of a large sell off. Opportunistic investors would quickly sell their own shares, expecting the price to fall further, and would plan to buy the shares back later once the price had fallen (there are also a variety of speculative financial instruments that would simplify executing this kind of strategy). Ballmer would now be unable to liquidate his shares for a reasonable price, because once the market knows that he is determined to sell, he'll have lots of competition.
Obviously, this would never happen, because it would greatly diminish the benefit of Ballmer's decision to sell, and would dissuade him from making the decision.
To accomodate this situation, Ballmer's broker would attempt to arrange the transaction behind the scenes, without the use of all of the machinery described above. This would likely take the form of a few phone calls to the large trades desk at other brokerages. "Psst. If you have a client interested in a large trade of MSFT, I might be able to help". The advantage is to be secretive so as to avoid giving away information that would tip off the market, while still finding someone to sell the shares to.
The eventual price of the shares would probably fall significantly below the market price of the stock. Why? To put it simply, liquidity costs money. It is still cheaper to use this approach than to try to sell a massive number of shares on the open market.
So, Ballmer may have made a life changing decision to sell all of his shares, or he may just want to diversify a bit, but his best move is always to sell it in small chunks in order to get the best price possible for the shares. As you can see, liquidity costs money.
Amazing magic tricks
Microsoft makes only about 10 billion in profits, so it's severly overpriced,
Um... that simplifies things just a little too much. There are huge issues that go into market cap and you really are looking at a longer term for stocks, not just one year.
And even if you do think that its a good stock measurement then why not buy Philip Morris? They have a Market Cap of 85.5 B and 2002 profit of 11 B (or a profit/interst rate of 13%). Good luck with the lawsuits.
The surprise isn't how often we make bad choices; the surprise is how seldom they defeat us.
Steve Ballmer was not an "official" founder, but he was a buddy of Bill and Paul from pre-MS days. My guess is that they feel he should have been a founder.
Also, he's on the board of directors.
And as to your last troll of a question, they do it for the same reasons geeks stay up all night writing code for open source projects. It's not about the money for either Ballmer or Linus. But my guess is that my previous sentence will be enough to get me modded all the way down to hell. Make it so...
"If you want to improve, be content to be thought foolish and stupid." - Epictetus
Only the most deluded Linux fanatics think MS is going the way of the dodo.
1. Quality doesn't always determine purchases. (Ex: Consoles - IMO, Nintendo has the best games around)
2. MS produces decent software - not amazing, but pretty good. They make great UIs, and that's what helps the average user.
3. MS is powerful. They'll bully and bribe their way to domination, as they have done in the past.
4. Finally, MS hires passionate people (well, I know they did a few years ago). These people are not going to stand still.
According to the insider report at Yahoo, this is the first time Ballmer's done anything with his stock in over a year.
Does that make selling them illegal?
Maybe I should pull the Yankees off the market then...
You can never go home again... but I guess you can shop there.
Ben Stein was on CNN a while ago, plugging Yes, You Can Time the Market! and the website, perhaps Ballmer was watching too.
I sold my "share" in Microsoft by looking at my Mutual Fund advisor and telling him, "I do not want to hold any fund that contains Microsoft". We made it happen, last week. My reason: Microsoft does evil things to please the shareholders. I don't want to be part of that inadvertantly.
I feel better now, perhaps Ballmer will too? By the way, do you get bonus karma points for not owning Microsoft shares?
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?
I wasn't trolling. It was a serious question.
Ballmer is a family man. He has kids. If you were in his shoes, wouldn't you want to spend more time with them?
Or, having experienced the highs of corporate management, wouldn't you want to experience life to the fullest? Learn how to scuba dive, paraglide, fly a helicopter, race a Formula One car, trek across the Andes, climb Mount Everest or swim with dolphins?
There is life after Microsoft, many of the company's earliest employees have experienced it, but why not Ballmer? OK, he's obviously driven and loves his work, but what's the point of having billions if all you have to show for it is the number of zeroes on your bank statement?
Life isn't a trial run. You only get one shot. This is a guy who could do almost anything. So, why isn't he?
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.
Oh well, to each his own.
"Accept that some days you are the pigeon, and some days you are the statue." - David Brent, Wernham Hogg
Indirectly, probably your pension firm, your building society, the bank holding your variable interest rate savings account...
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
Slashdot reader SgtChaireBourne mentioned this 2 weeks ago in a comment titled Pump & Dump, in response to a post of mine saying that probably Microsoft code is difficult to maintain because Microsoft isn't fixing bugs.
According to SgtChaireBourne, selling of Microsoft stock by Microsoft executives is common. He said, "Both the frequency and volume of sales is increasing: They're all selling as fast as they get."
SgtChaireBourne pointed to the SEC (U.S. government Securities and Exchange Commission) list of Microsoft executive trades of stock. I looked around and quickly found an example. A Microsoft Group Vice President, Kevin R. Johnson, received 322,560 shares of stock and sold it the same day. He received 244,760 shares of stock on March 6, 2003 and sold that the same day.
SgtChaireBourne also said, "Don't forget that benefits [employee benefits at Microsoft] have been cut way back and there's also been outsourcing like mad. Consultants and contractors don't show up as layoffs when you let them go.
Earlier in this thread, RoLi said, "Microsoft executives know that Microsoft has a lot to lose and not much to gain. The only market where they are strong (the desktop) they have no room to grow, everywhere else they are losing (servers, embedded systems, gaming consoles)." (RoLi's comment #6030636.)
To this must be added that most people who bought a computer as powerful as a Pentium III 866 MHz won't buy another computer. The faster Pentium IIIs were good enough for almost everyone. I have often seen computers survive for more than 10 years. I have a voicemail computer with a 386 SX-16 processor that is perhaps 15 years old, and has been in continual use. The computer market is fast collapsing.
Maybe he wants to have some guaranteed cash when he retires, no matter what happens to microsoft?
He's not doing anything different than many other investors with many other companies.. he's selling stock at a profit to get cash.
Because private islands are BORING. Having everything just becuase you have money is BORING. There is no challenge to it, life ceases to have meaning.
Oh, I'm not saying that I wouldn't live in the lap of luxury if I were that rich.. but simply existing and being wated upon would not be a satisfying life.
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
> there are hardly any valuable commercial software without an equivalent open source nephew
/ports/ of those apps, I'll be more enthusiastic. We're using linux terminals at work for our sales staff already, and other than some word doc issues with OO.o it works very well. However, our prepress and production department would be simply impossible.
Sorry to disagree, but there are a LOT. Perhaps you mean "high-volume off-the-shelf shrinkwrap software"? Here are a few that don't have anything vaguely approaching an alternative, some of which are shrinkwrap:
- QuarkXPress/Adobe Indesign (No scribus doesn't count)
- Adobe Photoshop (GIMP is good, but nowhere near pshop. No ICC profiles, no decent CMYK, lack of previews, slow).
- Pongrass Classified Pagination (newspaper classified advertising booking & pagination system)
- AutoCAD
- Adobe Illustrator
- Adobe Acrobat (no, I don't mean just distiller)
- An AppleTalk server that's reliable and works properly with all mac apps
- oodles of small-volume "solutions"-based customised software for industry-specific needs (ATEX, etc).
When I start seeing