Satya Nadella Sells Half of His Shares in Microsoft
wsj.com
wsj.com
Or maybe he just wants to diversify or buy personal toys and real estate.
He still has about $300 million in shares.
There also seems to be a potential tax element to it:
“Satya sold approximately 840,000 shares of his holdings of Microsoft stock for personal financial planning and diversification reasons,” a Microsoft spokesman said in a written statement. “He is committed to the continued success of the company and his holdings significantly exceed the holding requirements set by the Microsoft Board of Directors.”
Analysts said the move could be related to Washington state instituting a 7% tax for long-term capital gains beginning at the start of next year for anything exceeding $250,000 a year.
The answer to that question is yes, regardless of what Nadella does/did. I guess if you have a feeling MSFT is going to outperform the tech market or market as a whole, not diversifying can work, or if you lack the ability to hedge much and want a chance to get rich (and a chance to lose it also).
Of course, he lost out selling at $100/share (vs today's $300+/share). And in 2014 when he sold a bunch of stock at $50/share. I'm going to say that if history has any saying in this, it means that the stock will be at $600/share the next time he sells.
Insider buying is considered a strong signal because you usually buy because the insider thinks the share price will appreciate in the future.
I mean in my opinion, Microsoft chose to fail in competing with a smartphone OS because there would be an antitrust lawsuit.
If the answer is no, then it makes sense to sell immediately.
I thought there might be some kind of specific tax loophole or trick to moving the money out of the ESPP. I'm finding more and more of these tricks as time goes on, such as post-tax traditional 401k mega-backdoor Roth money (if it lasts past this year), etc...
Not a bad thing to diversify, but of you diversify to e.g. an index fund, often you end up correlated with tech owing to how large a chunk of index growth is down to Apple, Google, Amazon etc.
Also, if you ran the second biggest company on the planet, your investors would hate you for that behavior.
Ronald Wayne supposedly sold his 10% share of Apple for $800.
“Put all your eggs in one basket—and watch that basket.” -Andrew Carnegie
I agree that at least 1% of it, if a person had nothing else, which they probably would, should be put aside for retirement. I thought that went without saying.
Nevertheless, keeping 99% in one company would not be diversified.
It's not inherently bias to disagree about whether a risk is worth taking.
The choice depends heavily on the consequences, the relative value of success and failure, not just the probabilities.