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 common stock 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?

  • CreatedFebruary 13, 2015
  • Files Included
Post your question