aldo said:
Without that $150mil they would be bankrupt. They had all the $1bin tied up in various debts, agreements and lawsuits. I already posted a link to the 7% they owned, which I assume is the $150mil you are talking about.
As for my 'fantasies', I don't want to see Apple go. I'm just saying that when Apple was in dire state, Microsoft was the only one which pulled them out of their problems.
Aldo...
Wrong. Apple had over $1 billion in the bank, that's not including core assets that could very well be tied up as you suggest, that's $1 billion dollar that was "FREE" to do anything with. Period. They weren't tied up. They could be used at any time to purchase anything. In fact, this is part of why Sun Microsystems would've had a hard time purchasing Apple during it's dark days. Apple was far from "sacked" at this point. They would've had to deplete $1billion along with the costs of the entire company's tied assets. Sun as a company was far healthier than Apple at that stage, but at that stage Sun was much smaller in finances due to that "reserve" that Apple had. Trust me... McNealy would've loved to have had Apple.
The $150 million that Microsoft invested for non-voting (non-controlling, and therefore non-volatile) stock was done for 3 reasons:
1) Microsoft wanted to make IE the default browser on Mac for marketshare purposes. This was the "Main" reason.
2) Microsoft was settling numerous lawsuits that were outstanding with Apple going back to the dawns of the Windows vs. Macintosh and the various technological infringements. This was a way of cutting the court costs and settling. $150million gave Microsoft some non-voting stock that was sold relatively soon after it was obtained.
3) Microsoft had the DOJ over their head for "bundling" IE into Windows so investing in the competition was a goodwill attempt. Granted... it did involve the snafu of making IE default over Netscape, one of the companies in the DOJ hearings... but then again, Apple, Intel, Sun, Gateway, and others were also a part of that hearing regardless of business involvements with one another.
Could Gates buy Apple?
Ummm...
If he sold a good portion of his shares in Microsoft
where a majority of his finances are tied. Yes... he probably could. But let us consider that Gates is no longer the big man on campus at Microsoft. That would be Ballmer. Gates is their "visionary" man that's supposed to find Microsoft a future. Ballmer is the man running the core of the company day to day. Gates holds the majority of shares in MS, but his position isn't the principal, and he's not the only person that owns voting shares in Microsoft.
The day you see Gates buy into Apple, he will most likely sack out on Microsoft. The SEC will never allow it, nor will the Federal Trade Commission ever approve of such a thing. Apple's core value is substantial enough that it would take Gates selling off much of his controlling shares of Microsoft to make this happen to have the $ to invest in purchasing Apple. To which I ask you... why would he bother?
Only if Apple was on a stream heading in a direction far rosier than Microsoft and he wanted to get on the ship and ride it.
Being from the UK, I think you seriously misunderstand U.S. laws with regards to trade and how U.S. companies are allowed to work. For KMart to purchase Sears in the states, they had to sell of the majority of the valuable properties they owned to make it happen, and they had to be filed through and approved by the FTC and SEC to be allowed for this all to transpire. Both companies had been in hardship statuses, and Sears was more on the rise than KMart who had already did a considerable lot of pruning prior to the firesale they committed lately to purchase Sears.
While Microsoft is many times bigger than Apple, Gates isn't the only person with stock in Microsoft, and to get to a financial level to buy an Apple, he would have to sell off a considerable share of his stocks as that's where much of his personal wealth stems from is the assets that his finances are tied up in. He isn't going to just open a checkbook overnight and wake up with Apple.
His value is tied to his stocks. He has sold off stocks on an almost yearly binge to use as charitable donations he can writeoff on tax returns. Pure and simple. While his overall value is considerable, a bailout on Microsoft stock by him would diminish his overall value with each stock sold, he'd get less per sale, and the turnaround would likely put him in a position of losing a considerable chunk of Microsoft as he purchased Apple. To say "it's not going to happen" should be very clear.
That's before we consider the "Conflict of Interests" that the Federal Trade Commission is likely to find in such purchase unless he divests himself from Microsoft. That's before the argument of whether or not Microsoft as a company would be committing collusion on the American people if they collectively purchased an Apple, their largest competitor and arguably the biggest competitor left in the industry. Apple purchasing an eMagic or some other vendor is small potatoes. Apple being purchased by a Microsoft would be akin to General Motors buying Ford, Toyota, and Fiat
at the same time. Not so much in money invested... but in the wake of what the magnitude and impact would have on the computing sector akin to the automotive sector. Under U.S. law with regards to U.S. companies... this isn't going to be allowed to happen.
Now Apple buying Sun... that's more feasible. IBM buying Apple? Once again... more feasible. I doubt we'll see either though. Joint ventures are one thing, and perhaps some stock changing hands... but it'd never be a considerable lot of stock, and might even be like the Microsoft deal. That being non-voting. Non-voting stock is like saying "Hey I've got x shares of Apple... but I'm not asked to the board meetings and what I say doesn't really mean much no matter how much of it I buy."
