Ballmer Pares Microsoft Holdings

After days of being hounded by rumors of insider selling, Microsoft ‘fessed up on Friday.

Microsoft confirmed in a statement Friday that CEO Steve Ballmer is selling some of his holdings of Microsoft stock “to gain some diversification of his financial assets.”

Before taking into account recent sales, Ballmer held 470,968,074 shares of Microsoft stock, the company said. According to SEC filings late Friday, Ballmer sold more than 39 million shares on Wednesday and Thursday, reducing his holdings to 431,619,622 shares.

“Even though this is a personal financial matter, I want to be clear about this to avoid any confusion,” Ballmer said in the statement. “I remain excited about the potential for our technology to change people’s lives, and I remain as committed to Microsoft as ever.”

Unlike co-founders Bill Gates and Paul Allen, who have pared their stake in the company by half since 1994 through routine sales, Ballmer hasn’t sold Microsoft shares since May 1991, according to insider tracking service Washington Service. So sudden heavy sales by Ballmer raised concerns about the pace of business at the software giant, prompting the company’s reassuring statement.

Microsoft stock fared well under the circumstances, rising 6 cents on the day to close at 24.22 after having fallen in 7 of the previous 9 trading sessions.

The broader market was quiet in pre-holiday trading, although small caps continued to outperform, with the Russell 2000 gaining 0.8%.

The Nasdaq rose 2 to 1510, the S&P 500 climbed 1 to 933, and the Dow gained 7 to 8601. Volume declined to 1.2 billion shares on the NYSE, and 1.45 billion on the Nasdaq. Advancers led 21-10 on the NYSE, and 18-12 on the Nasdaq. Upside volume was 64% on the NYSE, and 65% on the Nasdaq. New highs-new lows were 368-11 on the NYSE, and 158-14 on the Nasdaq.

Marvell soared 16% on its first profit in two years, while TiVo and Serena fell on their results.

Research In Motion surged 8% to a new 52-week high on an upgrade, and SanDisk continued its strong run with another new 52-week high.

ASML fell 3.4% on a change in Intel’s lithography plans.

LookSmart gained 1.6% on new search technology.

EarthLink and United Online rose on Congressional efforts to make the Internet tax moratorium permanent.

SGI slipped 1% on layoffs.

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