Seriously, he says the dumbest things sometimes.
To catch you up, I attended the annual shareholder meeting for Microsoft last Tuesday. I'd never been to Microsoft's annual shareholder fest--not nearly the event that the Berkshire Hathaway meeting is, but it was held right here in downtown Seattle and walking distance from where I am. Why not? It might be interesting? =)
It had it's interesting moments, but I'll skip ahead to why Bill Gates is stupid. During the Q&A period, one shareholder asked about the stock price, and why several of the top management--including Bill Gates--sold stock mere days before the stock started going down. Somewhere in the neighborhood of $37 million, I think he said.
Frankly, the fact that Bill Gates sold about one-tenth of one percent of his Microsoft fortune is rather a non-event to me, and it was wisely pointed out that they all still had the vast majority of their fortunes tied up in Microsoft stock. Their interests were still very aligned with the average shareholder. It was a stupid waste of a question, I though, but Bill Gates said one thing that really bothered me. He said he agreed that they wanted a high share price.
Oh really? And why is that? They announced a share buyback plan recently that would buy several billion dollars of Microsoft stock. Now why would I want them to buy stock at a high price? That's just stupid. As a shareholder, I'd rather the stock price be LOW so they can buy back MORE stock for the same price. As someone who'd be perfectly happy to buy more stock, I'd like the price to be LOW so I can acquire shares cheaply. The only people--and I mean the ONLY people--who benefit from a high share price are those who are looking to get out. Those who want to sell their stock? And why the hell should we care what they want? If I were management of Microsoft, I'd rather make people who are in for it for the long run happy.
Look at what happened the last time Microsoft had a "high" share price. Back during the go-go Internet days. Rocking in the year 2000, Microsoft's stock traded at nearly $60/share. Today? It's at $34.09 at this moment. Those folks who sold at the end of 1999 or the beginning of 2000 obviously did very well for themselves, but pity the fool that actually was buying into the company at the time. I remember back then thinking people were completely NUTS for buying the stock at such unrealistic prices, and I even remember Steve Ballmer, the CEO of Microsoft, being quoted as saying the stock was too high. Then why the hell were you all buying billions--BILLIONS!--of dollars worth of the stock with shareholder money? Money not well spent, as it turns out, and is rather surprising for people who supposedly have most of their net worth in the company.
I so wanted to say something. I could have, too. I was seething. I wanted to them NO! Don't listen to people who are looking to SELL OUT! Consider the people who who rather BUY IN! Consider the people who are already bought in and want the most bang for their buck with the stock buybacks. I could have said something too. There were several people around the room with microphones, taking questions from shareholders. One of them stood a mere three feet away from me, and absolutely nobody was there to ask questions. I could have jumped up and told Bill what I thought about his statement about wanting the stock price high. NO! Don't do it!
But frankly, I didn't have the guts to call out the richest man in America as an idiot. Well, not in THAT public of a forum, at least.
A couple of days later, I read an article in the local paper that covered the shareholder meeting, and they mentioned all of the questions and answers covered during that Q&A period, including that question about the stock sales and share price, and including Bill Gates's comment about wanting the stock price high.
It so easily could have ended up mentioning me in the article. I'm not sure if I'm relieved it didn't, or upset that nobody else spoke up against such stupidity either.
Truthfully, I don't think Bill Gates really is that stupid. I suspect he meant that he wants to work on building products and selling products so the company deserves a fair value that continues to grow as high as possible, but that's not what he said. And for some people--I like to think it's the exceptionally smart people such as myself *wink*--we'd rather have the stock price to down. I could buy more stock cheaper, AND get even more through that stock buyback plan.
I do wish somebody said it, though, even if it wasn't me. Maybe next year.....