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Gates divorce: New York Times’ revelations and stock price information

The news about Bill and Melinda Gates divorce may have been a surprise, but left the markets completely unaffected regarding the Microsoft stock price. 

Τhe speculations though around the causes of the divorce are not over yet, as more and more revelations regarding Bill Gates’ behaviour and connections to Ebstein come to light. According to The New York Times, Μelinda French Gates wasn’t satisfied since 2018 with her husband’s handling of a previously undisclosed sexual harassment claim against his longtime money manager. Bill Gates moved to settle the matter confidentially and the money manager remained in his job, while Melinda insisted on an outside investigation.

There are also allegations, by people with direct knowledge of the matter, that Gates pursued women who worked for him at Microsoft and the Bill and Melinda Gates Foundation. In 2019, Microsoft’s board of directors, on which Mr. Gates sat, opened an investigation into one of those cases after being notified that he had “sought to initiate an intimate relationship with a company employee in the year 2000,” The 2000 incident and the board’s investigation was reported by The Wall Street Journal.

But according to The New York Times, the biggest problem for Melinda French Gates seemed to be the relationship to Jeffrey Epstein, whom Bill Gates got to know beginning in 2011, three years after  Epstein, who faced accusations of sex trafficking of girls, pleaded guilty to soliciting prostitution from a minor. Melinda French Gates had expressed discomfort with her husband spending time with the sex offender, but Bill Gates continued doing so, according to people who were at or briefed on gatherings with the two men.

So, in October 2019, when the relationship between Gates and  Epstein burst into public view, Melinda was unhappy. She hired divorce lawyers, setting in motion a process that culminated this month with the announcement that their marriage was ending. The revelations were painful to Melinda because she had already expressed her disagreement with her husband associating with  Epstein. Already in 2013, Melinda had expressed her discomfort after she and Gates had dinner with Epstein at his townhouse, according to people briefed on the dinner and its aftermath. (The incident was reported earlier by The Daily Beast.)

For years, Mr. Gates continued to go to dinners and meetings at Mr. Epstein’s home, but according to his spokeswoman, Ms. Arnold “Bill only met with Epstein to discuss philanthropy”.

Have the revelations affected the Microsoft Stock price?

Looking back, one could say that Microsoft has been ahead of the curve with the Gates’ divorce announcement, as the company’s President, Brad Smith, has been a public figure much more than ever before, even though he has been in that position since 2015. Gates stepped down as chairman of the board in 2014 but stayed as board member, a position he left in 2020. Microsoft has also been making very supporting statements to the news publishers versus Google and Facebook, on the ways the news outlets should be paid for their content on the platforms – which is more likely irrelevant, but definitely favourable to the company’s image in the media.

Microsoft reported a very strong Q1 results result, meeting analysts’ sales expectations and beating profit estimates, even though there was some skepticism about one-off benefits included in the results.

Net income for the third quarter ended March 31 jumped 44% to $15.5 billion, while revenue reached $41.7 billion versus the estimated $41.03 billion.

Microsoft’s solid financial performance was driven by Office 365 and Azure cloud services revenue. The company’s cloud solutions generated $17.7 billion in commercial cloud revenue, up 33% YoY.

Analysts offering 12-month price forecasts for Microsoft Corp have a median target of USD299.00, with a high estimate of USD340.00 and a low estimate of USD256.70. The median estimate represents a +19.95% increase from the last price of USD249.28.

Within May, the stock has been rather stable, with a lowest of USD239, but has not rebounced yet to the USD262 level that was prior to the announcement.

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