
Ballmer sells 20% of his MSFT holdings - 425
http://www.seattlepi.com/business/429709_ballmer06.html
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bill-nordwall
He was most likely waiting on the final results of on Washington State's
income tax initiative, which would have cost him millions had it passed:

[http://www.ballotpedia.org/wiki/index.php/Washington_Income_...](http://www.ballotpedia.org/wiki/index.php/Washington_Income_Tax,_Initiative_1098_\(2010\))

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vladd
He sold 12% of his MSFT shares, not 20% like stated in the title: 49.3 million
shares out of a total of 408 millions that he owned (SEC link:
[http://sec.gov/Archives/edgar/data/789019/000119309910000081...](http://sec.gov/Archives/edgar/data/789019/000119309910000081/xslF345X03/edgar.xml)
).

He said he might sell more by end-year, but didn't guarantee that he'll do
that ("He said he plans to sell as many as 75 million shares by year's end").
That would bring his sale percentage up around 18.3%.

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djb_hackernews
Hmm, I see a few posts defending this move because of tax implications,
putting the cost at $65,000,000 if he waits around for the 20% tax bite.

Seems like a pretty big bet that the value of MSFT won't increase by... eh...
70 cents?

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yatsyk
IMHO very good time for sale: few days after record revenue announce.

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morphir
to me it sends the wrong signal to other share holders. Sell now while the
share has a temporary peak.

their up and coming smart-phone business and being able to integrate that with
their other online products like Bing will decide whether MS will grow or die.
They are late in all domains, so they are gonna have to impress by pushing the
experience to new heights.. which I doubt they will pull off considering they
have a poor product development culture compared to apple and google.

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coliveira
I believe the main reason why MSFT is stagnant is that the biggest shareholder
(Bill) is selling this stuff constantly. His must have sold tens of billions
of MSFT is the last few years. It is just the inverse of a company like IBM
that is actively buying shares.

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vladd
According to <http://www.google.com/finance?q=msft> , 1% of Microsoft shares
changes hands each day. This means that every 3 months, on average, every
Microsoft share changes hands once.

Bill's selling represents less than 100% and occurred over a decade, which is
a much larger time interval. Nowadays mutual/hedge funds look at the company
performance (earnings) and at the stock price and effectively pour in the
capital whenever the P/E ratio drops below their threshold, thereby
effectively compensating the effect of those sales.

When 1% of a company's shares changes hands each day you can't really blame
Ballmer for stock price fluctuations.

In regard to IBM, when a company buys back its shares it effectively reduces
the number of outstanding shares on the market (and thus it increases their
rarity and therefore their price), but the money used for the buy-back could
have been instead paid in dividends or used for an external acquisition. It is
a management decision that partially says "we didn't find anything else better
to do with the money than this", but it's too complex to be analysed in a
comment's paragraph. The Ballmer transaction is on the market, investor-to-
investor; it doesn't change the number of outstanding shares nor does it
dilute the price.

~~~
coliveira
> 1% of Microsoft shares changes hands each day

yes, but these are transactions that follow the pattern of the market. Usually
they even out, with a few days having more sellers and on other days more
buyers.

When you have a share repurchase program, you are basically giving a support
for the market. It is hard for the stock to go much lower, because the company
is always buying.

Bill and Ballmer, on the other hand, are selling shares. This is not good for
the stock, even if spread over a long time.

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btilly
_When you have a share repurchase program, you are basically giving a support
for the market. It is hard for the stock to go much lower, because the company
is always buying._

This statement shows a common misunderstanding of finance.

The market cap of a company represents the market's best estimate of the value
of that company. When a company does a share buy-back, the company loses money
and destroys stock. The current value of the money used matches the value of
the stock destroyed, and so the market cap should be reduced by the amount of
stock destroyed. Therefore to first order effects, the result is that the
share price should remain constant. (There are second order effects where some
value is transferred from stock holders to option owners, which indicates that
the share price should go down.)

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patrickgzill
I don't think the DAY matters; as I understand it, sales by such insiders have
to be filed weeks in advance.

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cletus
This move is a little strange. It's a big chunk to sell all at once and some
will interpret it as a de facto vote of no confidence in MSFT.

The smoother way for executives to sell their substantial holdings in a
company is to say they will sell X shares per year for Y years (typically in
the name of diversifying one's holdings) and then put some independent third
party (with no access to insider information) in charge of the exact timing of
the individual transactions.

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rrhyne
The insider selling to buying ratio has been over 2000 in recent weeks. This
is likely less of a dire sign of MSFT's prospects than it is a condemnation of
the US economy after Heli Ben's QE2.

I bet he pumps it into commodities, metals and markets like brazil that aren't
devaluing their currencies.

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barrkel
Why do you think metals, Brazilian markets etc are a better store of value
than MS stock? Why would you expect QE to affect MS stock as a store of value?
In what circumstances would MS stock intrinsic value decrease but world
commodity prices hold up, if not a business failure of MS itself?

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rrhyne
MSFT is not immune to economic downturn especially a crash called by a
currency crisis. The FED is currently walking a currency crisis tightrope.

As for value stores, look at the performance of the Brazilian market over the
last few years and gold and silver.

Worse, if we have a currency crisis here the entire equities market is toast.
The people who called this depression (Schiff, Denniger, etc) are calling for
a currency crisis due to the fed's actions.

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trebor
I'm no expert, but this just screams doom to me. When someone inside the
company sells their shares in this quantity it's _always_ before something
big. I won't speculate at what is going on inside, beyond all the negative
image lately, but it can't be good.

And if he wanted to diversify his portfolio then he should buy some APPL!
(Laughed at my own joke, too.)

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chunkbot
It doesn't scream "doom" to me; Ballmer's sale looks like it was done mostly
for tax purposes.

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aaronbrethorst
It still sounds bad to me. It says to me that Steve thinks there's more upside
in lower cap gains taxes than hanging onto the stock. In other words, MSFT is
stagnant now and it's going to be stagnant for years to come.

If Steve had been doing what Bill does—selling off a big chunk of stock every
quarter—no one would've even blinked at this.

