I happened to read an interesting article about Bill Gates and his investments. Supposedly he earns $500 million per year in dividends from various stocks, including MSFT (I say supposedly only because I wonder if it is possible he may have other investments not reported).
I’ve often wondered and post here if anyone knows - when you generate that much in dividends, is it even possible to reinvest the dividends if one wanted to? Obviously his situation is different and he reallocates the funds (I would assume), but if he wanted to, could he? It certainly couldn’t be free reinvestment, I assume - would he pay millions to do it? The article stated he generates $117 million from MSFT - could he simply buy close to that amount in more stock?
Apparently Gates owns roughly 0.9% of MSFT’s shares outstanding. That’s a lot for one person, but surely the fraction of shares with automatic dividend reinvestment dwarfs that, and probably even Ballmer’s 4.5% stake, though I am not able to find any specific data on how prevalent DRIP usage is among MSFT or any other company’s shareholders.
Remember that MSFT is a $2.8T company. Even a stake the size of Gates’s, earning a quarterly dividend of $30M or so, doesn’t make much of a dent in the total trading volume (which is currently averaging $10.5B per day).
Thank you for the reply. I see what you mean about the scale, never thought of that…with so many shareholders and all of their dividend payments, even Gates’s large payment simply isn’t a factor. A simple element I missed apparently.
Given that at one point Gates owned 45% of the company and is now down to less than 2%, it seems unlikely that he would use dividend payments to buy more of it anyway.