Steve Ballmer. (Icon Sportswire via Getty Images)

Weird Money

Steve Ballmer now richer than Bill Gates via time-honored strategy of refusing to diversify his holdings

“Diversification is for losers” - Steve Ballmer, probably

7/2/24 3:31PM

In August 2014, Microsoft’s founder, Bill Gates, was worth approximately $78 billion. Meanwhile, Microsoft’s 30th employee-turned-CEO, Steve Ballmer, who was about to be replaced by Satya Nadella, was worth $20 billion.

In July 2024, Microsoft’s founder, Bill Gates, is worth $157 billion. Meanwhile, Microsoft’s 30th employee-turned-former CEO, Steve Ballmer, is worth slightly more than $157 billion, passing the company’s founder in net worth. How? While Gates diversified his wealth across several different investments and pledged to give away billions in philanthropic donations, Ballmer continued to YOLO Microsoft stock.

Bloomberg’s Billionaires Index tracks the portfolio’s of the world’s richest individuals, and 10 years after stepping down as CEO, more than 90% of Ballmer’s $157 billion is still invested in Microsoft stock. The rest is a few billion cash, as well as his stake in the Los Angeles Clippers and the team’s arena.

Ballmer Net Worth — Steve Ballmer's net worth breakdown, per Bloomberg

Compare this to Gates’ more diversified portfolio, which includes a $75 billion stake in his private investment firm, Cascade Investment, and just ~$30 billion in Microsoft.

Bill Gates' Net Worth — Bill Gates' net worth breakdown, per Bloomberg

I love Ballmer’s refusal to invest in anything (other than a professional basketball team, of course) except for Microsoft’s stock. He won’t even sign Bill Gates’ Giving Pledge! Most people would, from a risk management standpoint if nothing else, diversify their investments at $20 billion, especially if they had just been replaced as the CEO, right? But Ballmer went all-in on the man who replaced him, making $137 billion in the process. I guess the takeaway here is that if someone is good enough to take your job as CEO, they’re good enough to invest in.

Jon Keegan3h

Snap shoots up 25% on $400 million deal with Perplexity, strong earnings

Snap shares shot up as much as 25% in after-hours trading on the release of third-quarter earnings that beat estimates, as well as the announcement of a big deal with AI startup Perplexity to integrate its “conversational AI search” into Snap products.

Some highlights:

Revenue came in at $1.51 billion, up 10% year on year (compared to Wall Street’s estimate of $1.49 billion).
Adjusted EBITDA was $182 million (estimate: $124 million).
Global monthly active users hit 943 million, up 7% year on year.
Perplexity will pay Snap $400 million “over one year, through a combination of cash and equity, as we achieve global rollout” of its conversational search engine within Snapchat.

The company also announced a $500 million stock buyback program.

Snap shares rocket 25% on strong forecast, $400 million Perplexity deal

Some highlights:

Revenue came in at $1.51 billion, up 10% year on year (compared to Wall Street’s estimate of $1.49 billion).
Adjusted EBITDA was $182 million (estimate: $124 million).
Global monthly active users hit 943 million, up 7% year on year.
Perplexity will pay Snap $400 million “over one year, through a combination of cash and equity, as we achieve global rollout” of its conversational search engine within Snapchat.

The company also announced a $500 million stock buyback program.

Duolingo dives on Q3 user growth miss, uninspiring guidance

Duolingo has run into stiff headwinds this year.

Matt Phillips3h

Luke Kawa3h

Nvidia slumps as Jensen Huang warns that China “will win” the AI race versus the US

Nvidia tumbled late in the session Wednesday after the Financial Times released an article in which CEO Jensen Huang says that “China is going to win the AI race” because it has a more favorable regulatory environment and cheaper access to power.

Reading between the lines here, I’d say the main takeaway for traders is what’s left unsaid at the end of this sentence: “China is going to win the AI race” — without having access to Nvidia’s flagship processors, or even wanting its nerfed chips!

Not exactly a signal that Nvidia’s hardware is as all-important and synonymous with success in AI as its stock price and revenue trajectory would suggest it is!

President Trump didn’t discuss Blackwell chips with Chinese President Xi at last week’s meeting, being convinced by advisers to keep that off the table. And while Nvidia has the all-clear to sell its H20 chips to China again, China’s internet regulator apparently instructed its leading tech companies not to buy them, preferring to bolster its domestic capabilities.

Max Knoblauch3h

Lucid dips as it lowers its full-year production forecast

Shares of Lucid are down more than 4% in after-hours trading on Wednesday following the luxury EV maker’s third-quarter earnings results.

Lucid, which delivered 47% more vehicles in Q3 than in the same period last year, posted an adjusted loss per share of $2.65, compared to the $2.29 loss per share Wall Street analysts polled by FactSet expected.

The company also:

Booked $336.6 million in revenue, up 68% from last year and above the consensus estimate of $349.5 million.
Updated its full-year production outlook to 18,000 vehicles, the bottom of its previous range of between 18,000 and 20,000 vehicles. Wall Street expected the company to build 18,940 vehicles on the year.

Lucid shares sold off heavily during Q3 as the company executed a 1-for-10 reverse stock split that took effect in early September. The stock remains lower compared to its highs earlier this year and is down more than 40% year to date as of Wednesday’s close. That’s significantly underperforming larger rivals like Rivian and Tesla.

J. Edward Moreno3h

Lyft bookings top estimates as revenue grows

Lyft swung to a third-quarter profit, boosted by 11% revenue growth, as bookings topped Wall Street’s expectations.

Shares were up 2.7% in recent after-hours trading.

The company reported earnings per share of $0.11, compared with a loss of $0.03 in the year-earlier quarter. Gross bookings came in at $4.8 billion, slightly more than the $4.7 billion the Street was expecting. It reported revenue of $1.7 billion, in line with analysts’ expectations.

Lyft’s top competitor, Uber, reported revenue numbers on Tuesday that beat expectations, though its stock still took a dip on the news.