Slashdot Mirror
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
Accountants!
Accountants!
NetInfo connection failed for server 127.0.0.1/local
...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.
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
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).
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.
I'm sure he can afford to hire accountants to ensure that he uses the optional LIFO method of determining his basis. In other words, he's going to match all these shares he's selling with those purchased under his stock option plan during the bubble, and this is going to go down as a huge capital loss!
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
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.
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.
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.
There are huge issues that go into market cap
Yes: there is a lot of hype and gambling, and then there is actual value. And to discover how much of a stock's price is due to hype, you compare how much it actually earns for a given amount of money invested in it relative to other investments. That's the point of the comparison.
and you really are looking at a longer term for stocks, not just one year.
Maybe you are. Most investment managers aren't.
Optimal investment strategies strike an optimal balance between the cost and risk of trading and the cost and risk of staying with a given portfolio. Given that trading has become very cheap, it makes sense to trade shares much more frequently than it used to.
And even if you do think that its a good stock measurement then why not buy Philip Morris?
You answered your own question: PM is an even higher risk investment than Microsoft. But Microsoft's lawsuits will probably become as vicious and pervasive as the tobacco lawsuits: not only will the monopoly lawsuits expand, you'll probably also get liability and patent lawsuits.