Tech's biggest loser: Bill Gates
Photo: Bill and Melinda Gates Foundation
The collective net worth of the super rich on Forbes's annual list of the 400 wealthiest Americans fell by $300 billion over the past 12 months, and the tech sector spilled its share of the red ink.
Microsoft's Bill Gates lost the most — at least on paper. His net worth dropped from $57 to $50 billion, not enough, however, to keep him from topping the list for the 16th year in a row. Two current and former Microsofties were close behind: Paul Allen (No. 17) lost $4.5 billion and Steve Ballmer (No. 14) gave up $1.7 billion.
Other notable losers were Michael Dell (No. 13), down $2.8 billion, and SAS's James Goodnight (No. 33), off $1.9 billion.
In this company, the $600 million that Apple CEO Steve Jobs lost on paper doesn't seem so bad. In fact, on the strength of the $5.1 billion he still has, he moved 18 spots up the Forbes 400 list, from No. 61 to No. 43.
Below: The 12 richest tech moguls and their change in net worth. One actually got richer. Can you guess who?
Apple could buy Dell with cash
Here's an interesting corporate milestone: When the markets closed on Wednesday, Dell (DELL) was trading at $11.98 share, with 1.96 billion shares outstanding. That puts Dell's market capitalization at $23.5 billion.
Meanwhile on Tuesday, Steve Jobs reported that Apple (AAPL) ended fiscal year 2008 with $24.5 billion in the bank.
In other words, Apple could buy Dell with the cash it has on hand and still have more than $1 billion left over. (Or rather $10 billion, if you count, as reader Joe Goodart does, the $9 billion Dell has in the bank.)
Hard to believe that it's been only 11 years since Michael Dell, asked what he would do if he were Apple's CEO, answered:
"What would I do? I'd shut it down and give the money back to the shareholders." (link)
For the record, Apple's market cap today stands at $85.8 billion.
Don't cry for Michael Dell, however. According to a list of the 400 wealthiest Americans published last month, his net worth is still more than three times Steve Jobs’.
- Michael Dell: $17.3 billion
- Steve Jobs: $5.7 billion
For a timeline of other Apple v. Dell milestones, see MacDailyNews here.
Why Apple is now worth four Dells
It was only seven months ago that we celebrated the 10 year anniversary of what may be Michael Dell's most famous quote. Asked on Oct. 6, 1997, what he would do if he were in charge of Apple, he told a crowd of several thousand technology execs gathered in Orlando:
“What would I do? I’d shut it down and give the money back to the shareholders.” (link)
The irony, as we noted last October, was that Apple's (AAPL) market cap was then double that of Dell, Inc. (DELL). Since then, Apple's value has gone on to triple and, last week, quadruple Dell's. Here, thanks to MacDailyNews, are the market cap milestones:
- Jan. 13, 2006 Apple passes Dell: $72.13 billion vs. $71.97 billion
- July 27, 2007 Apple doubles Dell: $127.81 billion vs. $63.65 billion
- Dec. 6, 2007 Apple triples Dell: $165.66 billion vs. $54.42 billion
- May 1, 2008 Apple quadruples Dell: $158.66 billion vs. $38.97 billion
By week's end, Apple was worth 4.04 Dells.
Michael Dell, however, is still worth 3.01 Steve Jobs, according to the latest list of the richest Americans:
- Dell's net worth: $17.2 billion
- Jobs' net worth: $5.7 billion
And according to IDC, Dell is America's No. 1 PC maker, with a 30.9% U.S. market share, while Apple is No. 4 with 6%.
So why the big difference in market capitalization? Apple's track record of innovation, integration and customer service has something to do with it, but investors pay even more attention to the margins.
- Apple Profit margin: 15.13% Operating margin: 19.28%
- Dell Profit margin: 4.82% Operating margin: 5.91% [Source: Yahoo Finance]
In other words, Dell sells a lot more machines, but Apple makes way more profit on each machine it sells.
Dell vs. Apple: 10 Years Later
It was 10 years ago that Michael Dell, speaking before several thousand technology executives at ITxpo97 in Orlando, answered a question about what he would do if he were CEO of Apple with a remark he probably instantly regretted:
"What would I do? I'd shut it down and give the money back to the shareholders." (link)
As others have noted, Apple's (AAPL) market capitalization today is more than double that of Dell (DELL):
Apple: $140.4 billion
Dell: $62.27 billion
But don't shed a tear for Micheal Dell. According to a list of the 400 wealthiest Americans published last month, his net worth is more than triple Steve Jobs'.
Michael Dell: $15.5 billion
Steve Jobs: $4.9 billion
[Chart comparing 10 years of Apple and Dell share prices courtesy of NASDAQ.]
