How to loose $3 billion in one day
May. 1st, 2006 07:53 pmRecently I decided to buy some stock. After couple of weeks of deliberation I decided to buy MSFT (Microsoft).
Wednesday, 2006 April 26, , after trades. MSFT cost $27.10 per share. I'm asking to buy 295 shares for no more than $27.11 per share.
Thursday, 2006 April 27. To my pleasant surprise, I bought 295 shares at $26.98 per share (so paid ~$38 less than expected).
During that day (Thursday), MSFT grew ~0.5%, so my wealth grew ~$40.
That was the end of my shareholder's luck...
Next day, Friday, 2006 April 28, Microsoft stock took its biggest one-day fall in more than five years (11.4%).
I lost $800.
Bill Gates, as the largest MSFT shareholder lost $3 Billion.
What is the reason for such dramatic MSFT plunge? --- Microsoft announced that they want to spend more money on research to fight against Google (Search) and Sony (Play station). Apparently majority of investors don't believe that Microsoft can spend this money efficiently. So, majority of investors decided to sell MSFT.
My only regret is that if I buy stock one day later, I would be able to buy 11% more Microsoft shares for the same amount of money
:-)
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Microsoft's one-day stock plunge
Gates briefly acknowledged the stock market's reaction in a Seattle speech Friday.
"We announced yesterday that our [research and development] spending is going up even more," Gates said. "Some people are very enthused about those investments. Others were wondering why we think we need to invest so much. It really comes back to the optimism we have about these advances."
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Wednesday, 2006 April 26, , after trades. MSFT cost $27.10 per share. I'm asking to buy 295 shares for no more than $27.11 per share.
Thursday, 2006 April 27. To my pleasant surprise, I bought 295 shares at $26.98 per share (so paid ~$38 less than expected).
During that day (Thursday), MSFT grew ~0.5%, so my wealth grew ~$40.
That was the end of my shareholder's luck...
Next day, Friday, 2006 April 28, Microsoft stock took its biggest one-day fall in more than five years (11.4%).
I lost $800.
Bill Gates, as the largest MSFT shareholder lost $3 Billion.
What is the reason for such dramatic MSFT plunge? --- Microsoft announced that they want to spend more money on research to fight against Google (Search) and Sony (Play station). Apparently majority of investors don't believe that Microsoft can spend this money efficiently. So, majority of investors decided to sell MSFT.
My only regret is that if I buy stock one day later, I would be able to buy 11% more Microsoft shares for the same amount of money
:-)
===
Microsoft's one-day stock plunge
Gates briefly acknowledged the stock market's reaction in a Seattle speech Friday.
"We announced yesterday that our [research and development] spending is going up even more," Gates said. "Some people are very enthused about those investments. Others were wondering why we think we need to invest so much. It really comes back to the optimism we have about these advances."
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