Sue Hartigan <[EMAIL PROTECTED]> writes:
Wall Street's high lasted only minutes,
but Bill Gates' milestone of the wild day
is forever - yesterday his personal stake
in Microsoft passed $50 billion.
That is a stunning Wall Street record -
and comes just 23 years after Gates set
up the company from nothing with
college buddy Paul Allen.
Gates is now richer than hundreds of
countries around the world.
The 42-year-old chairman of Microsoft
Corp. saw his fortune swell by nearly $1
billion during eight frenzied hours of
trading as the Dow Jones industrial
average cracked the 9,000 mark briefly.
It boosted his personal wealth to $50.35
billion, easily letting Gates retain his title
as the world's richest man. Microsoft,
the software company he co-founded in
1975, is worth more than $220 billion.
Yesterday's rise makes him richer than
the entire economies of most nations,
including the oil-rich states of Kuwait
($28.9 billion) and the United Arab
Emirates ($42.8 billion), as well as
Egypt ($45.5 billion), Hungary ($42.1
billion) and Nigeria ($28.4 billion).
From a Harvard dropout who started on
a shoestring in a friend's garage, Gates
has become the new model of the
American dream, replacing Henry Ford
and Andrew Carnegie.
All of Gates' wealth is tied up in
Microsoft stock, which has been one of
Wall Street's biggest winners ever.
In the last nine months, as the Dow
surged 1,000 points over last summer's
historic 8,000 level, Gates earned a
staggering $20 billion in paper profits
on his Microsoft stock.
It could buy a $9 meal for every man,
woman and child on the planet.
Over that nine-month period, it amounts
to earning an hourly wage of about
$13.8 million.
Investors love the nerdy rich man
because he's created so many rich
people with his Microsoft stock.
Even scores of his employees at
Microsoft have become millionaires on
the stock options he awarded as
bonuses in lieu of cash over the years.
His stock is even stronger than the
American greenback.
Dollars shrink in value about 3 percent
a year due to inflation, but Microsoft
stock increases each year, 38 percent
since January alone.
While Wall Street forgives Gates almost
anything, bureaucrats in Washington
aren't that admiring.
Federal regulators and the attorney
general are probing Gates'
money-making machine for possible
strong-arm tactics that may have
broken monopoly laws.
Being rich has its price. Senators have
called Gates to Capitol Hill for an
unprecedented and humiliating public
grilling. Even some of his biggest
boosters of the past are turning against
him.
Just yesterday, the respected editor of
Windows Magazine, former Gates
booster Mike Elgan, published an angry
open letter to Gates, urging him to
reform his products or lose out on the
race to the future.
"The time has come for someone to
publicly state your dirty little secret:
Thanks to Microsoft's 13-year
obsession with adding features,
Windows has become a bloated,
unwieldy product only experts can use
without confusion, crashes and endless
compatibility problems," Elgan said.
Little seems to stop investors from
pouring money into Gates' stock, with
more than 9.8 million shares trading
hands yesterday.
If Gates makes big bucks on his stock,
does it mean other investors will cash
in?
Not always, says investment expert
Charles Crane of Key Asset
Management.
"It's never too wise to hang your hat on
one criterion. High insider ownership is
a good measure, but it's shortsighted to
use that as your only criterion."
Every time Microsoft stock moves up
just one point, Gates racks up about
$541 million in paper profits.
Of course, he also loses that amount if it
drops one point.
Gates and his stock were knocked for a
loop a few weeks ago after his
showdown with the Senate inquisitors.
When the politicians hinted about
imposing new regulations on Microsoft,
the company's stock slid and Gates lost
$3 billion in just two days.
But lately he's been making it back big -
$2 billion in just one day last week after
forecasting strong sales.
Yesterday, Microsoft gained 11116 to
finish at 93.
To fight off Washington, Gates has
hired extra public relations people and
undergone a makeover as a new "Mr.
Nice Guy." Experts say Gates should
also boost his political contributions,
which were just a measly $61,000 last
year.
--
Two rules in life:
1. Don't tell people everything you know.
2.
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