Ownership Structure. Both General Electric and Microsoft Corp. feature charismatic and highly effective chief executive officers, display

Question:

Ownership Structure. Both General Electric and Microsoft Corp. feature charismatic and highly effective chief executive officers, display enviable records of serving growing markets with remarkable efficiency, and enjoy sterling accounting returns and stock-market valuations. GE and Microsoft are also huge organizations that rank near the top in stock-market valuation among U.S. companies. Interestingly, both feature significant institutional ownership, but are starkly different in terms of the amount of held by insiders. At GE, insider holding totals a mere 1 %, about average among industrial giants. At Microsoft, insiders hold an astounding 4.4 % of the company.
A. What economic differences in the products produced by GE and Microsoft could be used to explain such stark differences in ownership structure?
B. Legend has it that IBM turned down a chance to buy 50 % of Microsoft for $50 million in the early 1980s. Was this a mistake on IBM’s part?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...