Microsoft Financial Recap
Economic Power Used by Microsoft’s Founders (Estimate from Forbes 2001 List)
Bill Gates Microsoft stock -$65 per share $36.6 billion
Gates Non Microsoft stock 17.4 billion
Paul Allen’s Microsoft stock 9.6 billion
Allen’s Non Microsoft stock 18.6 billion
Gates Foundation Microsoft stock 24.8 billion
Cash on Hand at Microsoft 39.5 billion
Total (Excludes partnerships, etc.) $146.5 billion
Overall Ownership Structure at Microsoft
Shares of Microsoft stock issued, including options 6 billion
Total Microsoft stock value - $65 per share $390.0 billion
Less Gates and Allen share 46.2 billion
Remaining Value of Microsoft shares $343.8 billion
(Mostly public pensions, mutual funds linked to market indexes and other Microsoft employees)
Key Performance Data for 2 Year Period Ending 6/30/2001
Reported net income $15 billion
Wages paid but not charged to earnings $22 billion
Actual Net income if wages fully charged Significant loss
Federal income tax paid “Zero”
Estimated Damage from Products (viruses, etc.) >$10 billion
Legal judgments paid for product liability lawsuits “Zero”
Pyramid Scheme Player Distribution
As with all pyramid schemes, it is important to get as close to tier 1 as possible. From a practical standpoint, usually only tiers 1 and 2 will derive significant long-term economic rewards from such schemes.
Tier 1: Microsoft Founders, Gates and Allen
Tier 2: Executive management including Ballmer and others
Tier 3: Large actively managed mutual funds including Fidelity Magellan, etc.
Tier 4: Remaining Microsoft employees
Tier 5: Non Microsoft employee individual investors
Tier 6: Public (PERS) and private pensions indexed to S&P 500
Examining Microsoft Using Circles of Influence
A circle is a powerful image and as Emerson wrote it is repeated endlessly throughout nature. To truly understand Microsoft’s influence on health care one need only gaze into the eyes of a nurse with 20 years of experience as she counsels a student resident physician on a possible approach to helping a patient admitted to an emergency room.
In the nurses eyes we can often witness a circle of knowledge and care colliding with the residents circle of confidence, fear and potential. If the nurse and resident communicate well, great health care can be delivered. This is a tender balance predicated upon experience meeting potential and unfortunately today large numbers of qualified nurses are abandoning the profession.
We can see a similar situation at our existing legislative, judicial and executive institutions as they attempt to support injured businesses, schools and local governments in the equivalent of an emergency room with the Microsoft Corporation seizing the role of the student resident physician.
Microsoft Pyramid Collapses Enron and Hewlett Packard
Many of Microsoft’s circles of influence are now igniting self destructive behavior across a wide range of industries as these organizations compete for needed capital. One recent example of this involvement is Microsoft's role in the collapse of the Enron Corporation, the nations largest natural gas distributor, thereby affecting most Americans? Enron owns various public utilities, including PGE, the largest electric utility in Oregon.
Another recent example of self-destructive behavior is Hewlett Packard’s attempt to buy Compaq computer for $25 billion. Although the Hewlett Packard founding families are opposing the merger, it is difficult to reach them, in particular Walter Hewlett.
When I called his foundation I was told that all communications go through a public relations firm in New York. This is fascinating because this same firm is also representing Weyerhaeuser in its hostile takeover attempt of Willamette Industries and other companies doing takeovers.
The firms principal clearly told me that "You don't talk to Walter unless I decide so." This would be decided after reviewing my web site which of course has various reports regarding pension fraud at Weyerhaeuser, etc. It doesn't look like I'll be getting a call from Walter so if any of you out there know him, please do let him know I have been screened. My reason for the call is to present a simple focused plan that could quickly and quietly end this ridiculous merger attempt which would be a disaster for shareholders.
Since all public corporations compete for the same pool of capital, investment dollars that were previously going to purchase Enron stock are now being re-allocated to other companies with Microsoft taking the largest share. The same will be true for Hewlett Packard if the Compaq merger proceeds. We will follow this “circle of investment” to see how it works and how Microsoft’s pyramid scheme is structured so that Microsoft can pocket the proceeds resulting from these conflicts and unproductive mergers.
Enron’s CEO Kenneth Lay was one of George W. Bush’s strongest supporters. Clearly, President Bush was betrayed by Enron as the company played a key role in creating an artificial power crisis in California, left investors with significant losses, wiped out many of its own employees retirement assets and has also disrupted the national economy.
Enron tried to replicate Microsoft’s financial engineering but failed to see how it was structured. Microsoft can lose billions speculating on its own stock in the options market, as documented in a feature story in USA Today, yet this is barely news while Enron was toppled by much less significant events. We will examine this circle of influence and see how it has collapsed Lucent, Xerox and other major US based corporations.
In addition to Enron, President Bush has also been betrayed due to the deceptive lobbying of one individual, Ralph Reed, and one group, the Citizens for a Sound Economy. This circle of influence using Ralph Reed, a paid Microsoft lobbyist not disclosed to Bush when he formed his opinion on Microsoft, and the Citizens for a Sound Economy will be examined and we will see a major irony in that Microsoft is indeed primarily responsible for the current economic slowdown in the United States after already having destabilized the entire global economy........
billparish.com |
