Last week Microsoft's Bill Gates expressed regret about being the world's richest man. When I read this, I was reminded of the expression, "be careful what you wish for, you might get it."
Before launching into an analysis of how Gates could be toppled from his throne, it's worth noting that I've admired Microsoft and wondered whether it's lost its elbow room. I praised Microsoft's ability to adapt to change in two of my books, The Technology Leaders and Value Leadership. But in the last several years, Microsoft seems to have lost its mojo as I noted in these interviews by Red Herring and The Washington Post.
Here's a surprise. The biggest threat to Gates's top rank on the Forbes 400 comes not from the number two on the list, but from numbers 15 and 16. According to that September 2005 list, Gates's net worth totaled $51 billion. Berkshire Hathaway's Warren Buffett came in second at $49 billion. And he was followed by Microsoft co-founder Paul Allen ($22.5B), Dell's Michael Dell ($18B) and Oracle's Larry Ellison ($17B). Spots six through 12 were occupied by descendants of Wal-Mart founder Sam Walton, Microsoft CEO, Steve Ballmer, and heiresses from Cox Enterprises and Fidelity.
These slow growers currently lag a dynamic trio of enterpreneurs. 72-year old casino wizard, Sheldon Adelson (#15), is one. His 69% of Las Vegas Sands contributed to his $11.5B net worth. And Google co-founders Larry Page (#16) and Sergei Brin (#16) -- whose $11B net worths fall $40B below that of Gates -- also have the entrepreneurial vitality to surpass Gates.
How so? Their wealth is growing faster than Microsoft's. Ranking the last 12 months' stock price growth of the public companies that constitute the wealth of most of the top 16 (Cox Enterprises and Fidelity are privately held) reveals that Adelson leads the pack:
- Las Vegas Sands: +98%
- Google: +73%
- Oracle: +23%
- Berkshire Hathaway: +5%
- Wal-Mart: -4%
- Microsoft: -6%
- Dell: -31%
Just for fun, let's assume that these seven companies continued to experience the same change in stock price over the next five years that they did in the last year. Here are the six richest individuals of 2010 using this analysis, their forecasted net worth, (and the five year increase):
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Las Vegas Sands' Sheldon Adelson: $350B (+$339B)
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Google's Larry Page: $171B (+$160B)
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Google's Sergei Brin: $171B (+$160B)
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Berkshire Hathaway's Warren Buffett: $51B (+11B)
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Oracle's Larry Ellison: $48B (+$31B)
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Microsoft's Bill Gates: $37B (-$14B)
I don't know whether the stock price changes of the last year will persist for the next five (Las Vegas Sands stock is currently rated a hold by 10 analysts surveyed by Zacks). But if they do, Bill Gates's wish will come true by his 55th birthday (he'll be the sixth richest person). And it will be Sheldon Adelson's turn to suffer the slings and arrows of being the world's richest person.
DISCLOSURE: I am neither long nor short Microsoft shares. And I did consulting work for Adelson in 1986. For more about me, click here.
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Reader Comments (Page 1 of 1)
5-07-2006 @ 3:23PM
resti said...
I also think that the price of msft is going to go down further. After a short recovery this week, msft is likely to hit another low by the end of May. I am experimenting with a non-traditional system of analysing stocks, if you want to know my basis please visit http://www.astro-ipo.blogspot.com