[coliveira]

> 1% of Microsoft shares changes hands each day

yes, but these are transactions that follow the pattern of the market. Usually they even out, with a few days having more sellers and on other days more buyers.

When you have a share repurchase program, you are basically giving a support for the market. It is hard for the stock to go much lower, because the company is always buying.

Bill and Ballmer, on the other hand, are selling shares. This is not good for the stock, even if spread over a long time.

[btilly]

When you have a share repurchase program, you are basically giving a support for the market. It is hard for the stock to go much lower, because the company is always buying.

This statement shows a common misunderstanding of finance.

The market cap of a company represents the market's best estimate of the value of that company. When a company does a share buy-back, the company loses money and destroys stock. The current value of the money used matches the value of the stock destroyed, and so the market cap should be reduced by the amount of stock destroyed. Therefore to first order effects, the result is that the share price should remain constant. (There are second order effects where some value is transferred from stock holders to option owners, which indicates that the share price should go down.)

[nostrademons]

The point is that lots of other people are selling shares too - by the numbers, several times more than Bill and Ballmer. Yet nobody cares much if say, Fidelity or Vanguard or Goldman Sachs is selling.

In a liquid market, somebody is always selling. And somebody else is buying. In order to have a transaction, you have to have both a buyer and a seller. As long as those balance out, the price remains stable. You only see wild swings in price when there are suddenly many more sellers than buyers, or several more buyers than sellers. That doesn't happen with these planned insider transactions, because as soon as a sale is announced, a dozen computerized arbitragers swoop in to buy up the shares they've just sold (as long as the market doesn't consider the insider sales to be a vote of no confidence in the stock).