Paul _Re: Gates has a controlling interest
MSFT has a current market cap of approx. $468 billion, of which Gates holds about $100 billion-less than 25%. Thats a major interest, but not a controlling interest. (You do remember a guy named Steve Jobs, don't you?) If the value of MSFT shares fall, he (Gates) takes the same proportional loss as any other shareholder.
As to the cost of capital Here is the complete paragraph from your post that I responded to:The truth of the matter is that those who own the means of production actually benefit from wiping out speculative capital from time to time. After the cleansing, new capital costs less and capital shifts to productive investments again.(emphasis mine)
Lets say you have a start-up called pf.com and you need capital for growth. You decided to sell a 50%, interest, say 100,000 shares, in pf.com at an IPO. In todays market, with the DOW bumping at 10k, they might fetch $10 per share, but if you wait for "the cleansiing" and the DOW falls to 7500 you might net $7.50 per share. Now, the question is, if you sold 50% of you company for $1,000,000, or you sold 50% of you company for $750,000, which deal had the "lower capital cost"?
BTW, I had enough undergrad econ hours for a major, and enough graduate hours for a "specialization"( no majors in the MBA program, at least back then), but didn't declare either as I did not need either.
billwot |
