July 17, 1999
Gates Hits $100 Billion Mark, More or Less
By AMY HARMON
ast month, in the largest gift ever by a living person to a charitable
foundation, Bill Gates, the chairman of the Microsoft Corporation,
donated $5 billion to support education and health care causes.
Yesterday, in a few hours of stock market trading,
Gates's holdings surged by just about that amount,
brushing $100 billion for the first time.
The mixture of awe and dismay that has long
characterized America's fixation on Gates's personal wealth was perhaps best
summed up yesterday by Vincent Malgapo, a contributor to the Silicon
Investor electronic discussion forums: "Bill Gates MSFT stock worth $100
Billion right now!" read the comment, which was posted at 11:41 A.M.
"WOW!"
Gates, who owns 19.84 percent, or about one billion shares, of the company
he co-founded in 1975, owes his world record to the remarkable
performance of Microsoft's stock. Shares of the software company climbed
5.4 percent yesterday to a record high of $99.4375, on expectations that it
will establish a separate tracking stock for its Internet properties.
The company is the first to top $500 billion in market value. If it were a
country it would have the ninth-largest economy in the world, behind Spain,
which has a gross domestic product of $553 billion.
But the ballooning of Microsoft's stock price simply does not hold the same
fascination as that of its chairman's brokerage account.
"He finally did it," said Paul Saffo, director of the Institute for the Future in
Menlo Park, Calif. "This is what we've all been waiting for. How much
interest do you suppose it generates? I bet it's a 747 per day."
Philip Greenspun, creator of the Bill Gates Personal Wealth Clock, a Web
site that continuously calculates the value of Gates's Microsoft stock, had a
more pointed speculation.
"Maybe this will convince my students they shouldn't work so hard to
become rich," said Greenspun, a researcher at the Massachusetts Institute of
Technology's laboratory for computer science. "Because they're probably
not going to be richer than Bill Gates, so they might as well do something
interesting and valuable to society instead."
At a time of sustained economic prosperity, America's proclivity to
celebrate wealth is reflected in the high marks Gates still receives in national
opinion polls. And the 43-year-old executive, who lives in a $60 million
mansion on the shores of Lake Washington with his wife and two children,
has recently begun to contribute more to philanthropy.
But the $100 billion mark may also mark a change in popular perception.
"Gates has crossed a psychological marker and it's going to increase pressure
on him to recycle more and more of that money through his foundations,"
said Ron Chernow, an economic historian. "There will be more attention
focused on the extraordinarily lopsided distribution of wealth."
Of course, Gates is not the only software entrepreneur to become fabulously
wealthy in recent years. Microsoft's co-founder, Paul Allen, and its chief
executive, Steve Ballmer, are among the world's five richest people, along
with the investor Warren E. Buffett, whose 39.9 percent stake in the
investment holding company Berkshire Hathaway Inc. is valued at about
$42.5 billion, making him second to Gates.
Dozens of founders of fledgling Internet companies have become worth
millions on paper in a matter of months.
And by some calculations, Gates is poorer than John D. Rockefeller, who
had in excess of 2 percent of the gross national product at the peak of his
wealth in 1913.
Still, it may not be long before Gates passes another milestone.
"The key is when he reaches a trillion," said Lewis D'vorkin, an executive
editor at Forbes magazine, which publishes an annual list of the world's 400
richest people. "If Microsoft share price grows in the next five years as fast
as it has in the last five, he hits the big one in 2004."
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