He presumably made the statements to keep the sale from affecting the stock price in a bad light. Ironically, I think the stock may perform better if Ballmer did not claim he was sticking around.
I suspect there's a lot of people selling shares, just because of the possibility of the tax rate on long term capital gains going up at the end of the year.
"Even though this is a personal financial matter, I want to be clear about this to avoid any confusion. I am excited about our new products and the potential for our technology to change people's lives, and I remain fully committed to Microsoft and its success," said Ballmer, from an undisclosed island in the South Pacific.
There's a lot of speculation going on, and that's fair, I suppose, but isn't it possible that he just saw a record quarter, and realized that if he were going to cash out some shares, now is a good time?
Microsoft pays $0.16 in dividends per share per quater and their share price is ~ $27. That's about 2.3% anually. Not bad.. but long term i would bet against microsoft stock.
Long term capital gains tax cuts sunset after 2010, right? My back of the envelope math is that if he waits one nanosecond after midnight on December 31st he gets to pay Uncle Sam an extra $65 million. I can think of things that I'd rather do with the money -- I'm guessing he can, too.
The change in long term capital gains tax is a drop in the bucket relative to the fact that there is no Generation Skipping Transfer Tax (GST) and a low Gift Tax in 2010. I strongly suspect this is cash to pay for gift tax on gifts to his children and grand children. That would be several hundred million in tax savings.
Then maybe the company should award him $65 million in shares to compensate. Or he should take the hit -- he can certainly afford it. It's not a good time for Microsoft to have the CEO selling such a large stake. It looks like he's leaving and/or doesn't have confidence.
The devil we know has managed to take a company so successful that people considered it a threat to the entire industry and bring it to the brink of irrelevance, kept alive only by a nearly automatic revenue stream from entrenched 20-year-old software. An honor-roll high school student stepping in for Ballmer would probably be met with guarded optimism.
