Holding some 780 million shares of Microsoft - roughly 15% of the firm - gives Bill Gates a paper valuation of some $60 billion dollars depending, of course, on the firm's closing stock price. Although closely trailed by the likes of Larry Ellison and Warren Buffet, Mr Bill is widely considered to be the world's wealthiest man.
But this is NOT his real net worth.
If Mr Bill got disgusted with the trials and tribulations of dominating the software business, and decided to cash in his chips he certainly could not sell all that stock at one time.
The New York Stock Exchange - arguably the world's largest and most liquid market for equities - has an average daily volume of about one billion shares, with roughly 2,800 companies listed. It is clear that 780 million shares of a single company would be a rather large trade on any exchange.
The biggest players in the market, pensions, mutual funds and other institutional investors, all have strict limits on how much of a single company they are allowed to purchase. This minimizes their own losses should a single firm have poor results.
Most institutional investors already have all the Microsoft shares they care to own. Indeed, at the time of this writing Institutions have been net sellers of Microsoft shares, given the company's uncertain legal outlook, as well as a general slowdown in the PC business.
So it seems that Mr Bill would have no choice but to sell off his holdings over time in a series of smaller trades. Paul Allen has long been doing this, and over the past year has managed to dump less than 100 million shares. It would probably take Mr Bill over a decade to totally divest his holdings and who knows what would happen to the share price of Microsoft during such a long period of time.
And of course there is the question of exactly how other investors would react to the news that Mr Bill was dumping his Microsoft shares. The management of any publically listed firm - otherwise known as "Insiders" - are required to file papers ("Form 144") with the Securities and Exchange Commission, or SEC when they buy or sell shares in their own company.
Traders, analysts and smaller investors watch out for such filings, since they are public signals of managements private opinion of the firms future prospects. As soon as Gates filed his paperwork with the SEC Microsofts share price would not doubt be negatively impacted; almost everyone would be selling Microsoft. The word "bloodbath" comes to mind, given the rather extreme valuation of most tech stocks, Microsoft included.
By most accounts if Gates did manage to dump his 780 million shares in a short period of time the stock price might collapse by as much as 80%. After brokerage commissions and other costs (e.g., advisory fees) he'd probably walk away with about $10 billion.
But then there is the issue of taxation.
Anyone who dabbles in the market knows about capital gains taxes, and Mr Bill would have to pay the taxman also. As he's held Microsoft since its inception, he'd be taxed at the long term 20% rate, reducing his windfall to about $8 billion.