Ballmer Sells Part of his Stake in Microsoft 325
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."
not only the president.... (Score:5, Funny)
my guess is that some of those interests may include this [rogaine.com], this [hairclub.com], and if he's lucky after all that, maybe this [greatclips.com].
Mike
Talking of Great Clips... (Score:4, Funny)
Re:not only the president.... (Score:5, Funny)
Microsoft said the sales were undertaken so that Mr Ballmer could diversify his financial interests."
Doesn't this guy ever read Dilbert? As best as I can remember, this is how I went
Dilbert: The CEO just sold off a lot of his shares of the company. Does this mean we are in trouble?
PHB: No, he's just diversifying his portfolio.
Dilbert: Oh, that's alright then.
PHB: (Madly typing at computer.) Thought bubble: "Sell!...Sell!...SELL!!!"
Re:not only the president.... (Score:5, Insightful)
Actually Gates and Ballmer constantly sell shares, ironically at a higher rate since the stock collapse (MSFT used to cost 120$, now it's 50$ (or 25$ after the split)
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).
Microsoft, the stock will certainly go down in the next years.
Re:not only the president.... (Score:5, Interesting)
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?
Re:not only the president.... (Score:5, Interesting)
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...
Re:not only the president.... (Score:3, Interesting)
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.
Re:not only the president.... (Score:3, Informative)
If in the unlikely scenario that Bill Gates is found guilty of some crime I would also think ownership of the stock would have no bearing on whether he is guilty or not.
Microsoft on the way down? (Score:5, Informative)
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. [slashdot.org]"
SgtChaireBourne pointed to the SEC (U.S. government Securities and Exchange Commission) list of Microsoft executive trades of stock [sec.gov]. I looked around and quickly found an example. A Microsoft Group Vice President, Kevin R. Johnson, received 322,560 shares of stock [sec.gov] and sold it the same day. He received 244,760 shares of stock [sec.gov] on March 6, 2003 and sold that the same day.
SgtChaireBourne also said [slashdot.org], "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 [slashdot.org] 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 [slashdot.org].)
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.
Re:not only the president.... (Score:4, Insightful)
Dancing Boy is different. MS alrady pays him a 7-figure salary, so he doesn't really need to sell in the way that Gates does. Unless he's got a huge tax bill, gambling debt, ransom demand, etc. to meet.
Re:not only the president.... (Score:3, Informative)
Balmer:
He sold the stock for $23.93 to $24.67 a share. After the transactions, he directly owned 431.6 million common shares.
Billy G:
As of 4/29/03: 1,183,499,336 Direct control
You can work out the % ownership yourself.
Re:not only the president.... (Score:5, Insightful)
Of course, this could have been written by a NY Times journalist so take it with a grain of salt.
Re:not only the president.... (Score:3, Insightful)
This is true.
Microsoft, the stock will certainly go down in the next years
This may very well not be true, because predictions of the future are built into the current market price. (If you don't believe me, put your money were your mouth is and start short selling
Re:not only the president.... (Score:3, Insightful)
Re:not only the president.... (Score:2, Interesting)
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.
Re:not only the president.... (Score:4, Funny)
He probably wants to make a big investment in SCO.
I don't feel that bad (Score:2, Insightful)
Re:I don't feel that bad (Score:4, Insightful)
Re:I don't feel that bad (Score:2, Insightful)
Sing along: (Score:3, Funny)
Accountants!
Accountants!
Re:Sing along: (Score:5, Funny)
Accountants!
If your going to try to get cheap karma at least get it right.
Monty python quote:
It's fun to charter an accountant
And sail the wide accountancy,
To find, explore the funds offshore
And skirt the shoals of bankruptcy!
It can be manly in insurance.
We'll up your premium semi-annually.
It's all tax deductible.
We're fairly incorruptible,
We're sailing on the wide accountancy!
Re:Sing along: (Score:5, Informative)
Links to the Developers, Developers, Developers Steve Ballmer dance video. [ntk.net]
Re:Sing along: (Score:4, Funny)
Actually both references are perfectly cromulent.
Finally!!! (Score:2, Funny)
The rats are leaving the ship! (Score:2, Offtopic)
Re:The rats are leaving the ship! (Score:2)
Athens PC maybe ?
Yeah, I just sold my stake in Microsoft... (Score:3, Funny)
What he should do... (Score:2, Funny)
Re:What he should do... (Score:5, Informative)
Re:What he should do... (Score:4, Funny)
Maybe I should pull the Yankees off the market then...
Maybe to pay for treatment? (Score:5, Funny)
More links [ntk.net] for the video
I've got 4 words for ya! (Score:5, Funny)
LOVE !!
THIS !!
SELL !!!
YEEEAAAAHHHH !!!!
Re:I've got 4 words for ya! (Score:2)
This is nothing new (Score:5, Insightful)
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.
Re:This is nothing new (Score:5, Insightful)
Also, there is an old saying when it comes to exec's selling and buying shares. There is only one reason to buy but a multitude of reasons to sell. Perhaps he justs wants some extra pocket money?
Re:This is nothing new (Score:2)
Re:This is nothing new (Score:3, Interesting)
Now he is selling 10%?!
which means....
Which means.... (Score:3, Insightful)
He's not doing anything different than many other investors with many other companies.. he's selling stock at a profit to get cash.
Re:This is nothing new (Score:3, Insightful)
Re:This is nothing new (Score:3, Insightful)
Do you know what happens when a ship starts to sink? The rats start to jump off, that way they don't get sucked down with it. (Rats are excellent swimmers.)
So you see, the news is really about the rats. It's news because of the size of the rats, how high they're jumping, and which ship they're jumping off of.
Re:This is nothing new (Score:2)
Re:This is nothing new (Score:5, Interesting)
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.
Re:This is nothing new (Score:2, Insightful)
Re:This is nothing new (Score:4, Informative)
Your logic would be correct if stock price was the only factor determining a stocks worth. Stock splits alone change the price of the stock, but not the value to a particular shareholder. What used to be a $50 for Ballmer is now twice as many shares for ~$25. It's essentially the same value. Considering his volume this is a great time to sell.
This would be a good time to buy MS stock (Score:5, Insightful)
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.
Re:This would be a good time to buy MS stock (Score:5, Interesting)
Re:This would be a good time to buy MS stock (Score:5, Interesting)
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.
Too much of a simplification (Score:3, Informative)
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.
Re:Too much of a simplification (Score:4, Insightful)
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.
Re:This would be a good time to buy MS stock (Score:2)
Note that up to that point, M$ didn't engage
Re:This would be a good time to buy MS stock (Score:2)
Second, stock itself has no useful value; ie. you can't do anything with that money. When you sell it, you get cash with which to do other things. (D'oh!!)
As to selling while it's at a low, there can be lots of reasons for that. Frex, maybe it was better from a tax standpoint, or maybe a growth opportunity ca
No Conspiracy Here (Score:5, Flamebait)
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)
Re:No Conspiracy Here (Score:2)
Why? It's a story in the Financial Times, I'd say it warrants interest. Especially considering the timing.
I agree, but I have to ask - why does he work? (Score:2)
But I will leave you with one thought: Steve Ballmer is the richest employee ever. Never in all recorded history has anyone else hired by a company been paid so much.
(And, for the benefit of the few who don't understand the difference, Bill Gates, Paul Allen, Steve Jobs, Larry Ellison, etc were founders of their respective companies. Nobody hired them to do a job.)
Now, given that he's earnt several billio
Re:I agree, but I have to ask - why does he work? (Score:3, Insightful)
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...
Re:I agree, but I have to ask - why does he work? (Score:4, Insightful)
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.
Re:I agree, but I have to ask - why does he work? (Score:3, Insightful)
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.
Re:No Conspiracy Here (Score:2)
Our local little old lady (Score:3, Interesting)
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 mi
can't wait for the ... (Score:2)
alyways very entertaining, and let us on to the dirty Microsoft secrets.. (which i'm very sure would be just the tip of the iceberg.
hmm.. maybe Balmer plans to join the open source community... or he's forseen Microsoft's inevitible doom (wishful thinking by the GNU generation?
Microsoft's entire ldschool has almost retired.... its all new blood now... interesting..
Ballmer is a lot better than most (Score:5, Insightful)
Be advised, for those who haven't gone through the IPO process with a small startup, to the executive team, the word "liquidated" means sell as much as possible of this shit before it gets de-listed.
for example:
http://biz.yahoo.com/t/85/787.html
Ballmer and Boyle... (Score:2)
long term mandatory growth problems (Score:5, Interesting)
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
Stock option values (Score:5, Interesting)
That being said, I don't think Ballmer falls under the category of "low paid".
Re:long term mandatory growth problems (Score:5, Insightful)
But the main reason Microsoft ust keep stock options valuable is that they don't pay very well, and they compensate for that by diluting shares by issuing stock options regularly instead. As long as their share price keeps sky rocketing this is a good deal for everyone involved. However as soon as the share price is flat or falling, Microsoft massive stock options issuing risks causing further share price decline, and the low value of the stock options makes it less attractive for top people to work at Microsoft.
Their alternative if they can't sustain massive growth is increasing salaries and bonuses, and that will cut dramatically into their profit margins, which certainly will further damage their share price.
It's an extremely high risk strategy on their account - as long as they can grow, they look extremely good to investors. The moment they can't sustain it their problems will quickly multiply thanks to their dependence on rapid growth.
Re:long term mandatory growth problems (Score:5, Interesting)
(IANAL-RU?)
CEOs don't have a duty to increase the stock's value as quickly as possible. They just have a fiduciary duty to provide a reasonable ROI. This can take the form of increased stock price or healthy dividends, or even simply preserving the stock price in a downward economy.
While a CEO needs to be compelled to act in the interest of all stockholders, there is no reason to add qualifiers to that.
Re:long term mandatory growth problems (Score:4, Funny)
Yeah, if they had to give everyone a huge raise, the profit margins might nosedive below 82%, maybe even below 79% *shudder*. If it ever came to that, they'd be better off just throwing in the towel.
Re:long term mandatory growth problems (Score:2)
You could also argue this is one of the ridiculous things about the stock market: stock prices are a function of speculation on the value of future stock prices (which will, of course, be based
Re:long term mandatory growth problems (Score:4, Insightful)
This is a common, modern misconception. When you buy stock it is a like a loan. The companies are supposed to pay you a percentage of their profits. These are called dividends.
If you invest with the express purpose of buying low and selling high you will fail.
This is of course the problem today. People used to pay higher prices for stocks because it was perceived they would pay big dividends. Now, comapnies (like Microsoft) don't even pay dividends (which is illegal).
People bid up worthless pieces of paper.
Re:long term mandatory growth problems (Score:2)
Drugs (Score:4, Funny)
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.
Doesnt matter it comes back to him (Score:2)
He's probably just getting a little spending cash rather than accumulating more stock that he doesnt really need if he already has hundreds of millions of shares.
investment advice (Score:5, Funny)
Of course, Slashdot is riddled with Millionaires.
China has discovered Microsoft's secrets (Score:5, Funny)
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.
Balmer = Retire in 10 or 15 years (Score:4, Interesting)
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...
I know why. (Score:5, Funny)
Re:I know why. (Score:3, Funny)
This is on the news? (Score:2)
Re:This is on the news? (Score:2, Insightful)
Re:This is on the news? (Score:2)
Not necessarily. Remember, that MS could in theory be fined up to a trillion dollars if things go badly for them over the Passport[tm] security flaws. That's, um, 25 times $40 billion.
Software business model crisis (Score:2, Insightful)
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 e
Re:Software business model crisis (Score:2)
Re:Hardly any? (Score:3, Insightful)
OpenOffice affects tens (if not hundreds) of millions of users but something that is industry specific like Pongrass for example is out of the scope now.
lets give it a decade and see.
And he is buying... (Score:2, Funny)
Other stuff (Score:3, Interesting)
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.
It's a small world, after all. (Score:3, Interesting)
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.
Short of cash? Nah... the real problem is... (Score:2)
this is 100% non-news (Score:5, Insightful)
Accountants! (Score:3, Funny)
Paranoia-based Market Planning (Score:2, Informative)
Given: This provides an image of the president allegedly losing faith in his company and their projects. This may be an indicator for others to sell. Stock price-per-share drops.
Step 2: If the drop is enough, president re-purchases his previously sold shares of stock at a lower price.
Given: Everyone else scrambles to buy up what's left.
Step 3: Value skyrockets. Profit! (From leftover money in difference of higher-pric
Steve Balmer diversifies into (Score:3, Funny)
News at 11
Diversification (Score:5, Insightful)
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?
has to be said (Score:2)
Insider report. (Score:2, Informative)
Re:10% (Score:3, Insightful)
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"
Re:The question would be... (Score:5, Funny)
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.
Re:The question would be... (Score:5, Informative)
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.
Re:The question would be... (Score:5, Informative)
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.
Re:The question would be... (Score:4, Insightful)
Indirectly, probably your pension firm, your building society, the bank holding your variable interest rate savings account...
Time to burn some karma (Score:4, Insightful)
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.