News & Analysis

Bill Gates' marriage goes (micro) soft, causing volatility in stock prices

Andrew Saks, Tuesday, 4 May 2021

What do you get when you combine celebrity gossip with the publicly listed stock price of one of the world's most important global companies?

Volatility, that's what!

As the evening rolled on across the United States, the tranquility of a British Sunday night passed by on the other side of the Atlantic.

This morning, however, those taking a glance at the tabloid newspapers before starting their working week were greeted by a series of exposés relating to the private life of one of the world's wealthiest men.

So what? you may shrug. Surely there are better things to consider than the digging of dirt by hacks whose audience's interest spans no further than the photographs or the comments section?

Well, in the case of Bill Gates, the founder of global enterprise software giant Microsoft, there is far more to consider.

As one of the co-founders of Microsoft, which is a company upon whose operating systems and server/workstation infrastructure almost every company and domestic household depends on worldwide, Mr Gates stayed with the company until leaving its day to day operations in 2008 but was on the board until 2020, making it 45 years since he founded the company alongside the late Paul Allen.

Mr Gates is among Microsoft’s top shareholders. He owns 1.36% of shares and amassed his $130 billion purely via the company's almost monopolistic success, therefore any instability in his thus far utterly stable and continually advancing personal life is likely to be of importance to the global markets.

Thus, Mr Gates' wife finally taking the plunge and beginning separation proceedings is a major consideration. Melinda Gates has been married to Mr Gates for 27 years, and there had seemingly never been any issues at all.
Perhaps all the bizarre climate ramblings from a man who wants you to own nothing and be happy whilst he maintains his private jets, mansions, fleet of luxury cars and continues to expand his property and business empire was too much. Or maybe it was the constant warblings about advocating draconian restrictions on a global population for over a year, or that she didn't find the prospect of being made to eat synthetic meat very appetizing.

Either way, there is no prenuptial agreement, meaning that Mr Gates could be liable for a fortune in divorce settlement costs. Perhaps he will sell some of his stake in Microsoft? What will happen to the Bill & Melinda Gates Foundation? Will Melinda Gates rebel, and buy a V10 pick up truck and begin barbecuing sides of beef on a coal grill?

This morning, Microsoft shares are down by a considerable margin.

The hit this morning took Microsoft stock to 251.86 dollars per share after being up at 253.88 last week.

The projections this morning from analysts give the impression of a further decline in price, with an anticipated close at 20.00 today of around 251.4 dollars per share.

Perspectives from the United States during the night have hinted that it is overvalued and its future return is likely to be poor.

If it can be considered that Microsoft stock is significantly overvalued, the long-term return of its stock is likely to be much lower than its future business growth, which averaged 14.7% over the past three years and is estimated to grow 13.45% annually over the next three to five years.

Bill Gates' former involvement in pharmaceutical companies such as Johnson & Johnson and his perceived fanaticism relating to forcibly medicating the world's population has been an issue which has won him very few admirers. Should he lose his influence due to a huge divorce settlement, would he stop this political direction and calm himself down?

Although the Gates Foundation doesn't own as much pharmaceutical stock as it once did, it still has significant ownership of many vaccine research companies. Thus, Mr Gates has been pushing his agenda strongly for the past year.

There has now been a correlation between Mr Gates' split from his wife and the volatility of Johnson & Johnson stock, even though Mr Gates is not a shareholder - he purely has huge influence over support for its products by the public.

The stock dropped dramatically last night from 165.21 to 154.76 dollars per share, before rising straight back to 165.21 almost immediately.

Now that's volatility!

 

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