The Bill & Melinda Gates Foundation Trust unloaded its entire Microsoft holdings on May 15, selling 7.7 million shares worth about $3.2 billion. The move is part of a broader plan to ramp up grantmaking and eventually wind down the endowment by 2045. Microsoft shares dipped 0.42% to $422.07 on the day of the sale.
Why the sale happened
The trust built its Microsoft position almost entirely from Bill Gates' personal stock donations, not open-market purchases. Foundation officials have said the sale is liquidity-driven: they need cash to support a planned increase in annual grantmaking to $9 billion by 2026. That's a significant jump from current levels, and the endowment's managers are preparing for a full wind-down by 2045, a timeline Gates himself announced.
The transaction is subject to a federal excise tax of 1.39% on net capital gains, meaning the trust will pay roughly $44.5 million in taxes on the sale.
Ackman steps in
Investor Bill Ackman's Pershing Square disclosed a new 5.65 million share stake in Microsoft, valued at roughly $2.3 billion. Ackman framed the buy as a valuation bet on Microsoft's AI franchise, with a cost basis at 21 times forward earnings. His accumulation accounted for only part of the foundation's exit, and the net supply overhang weighed on intraday trade.
What the sale means for Microsoft stock
Despite the foundation's exit, Microsoft remains a core driver of the broader S&P 500 rally. The company has been riding a wave of AI demand, supported by a separate $9.7 billion deal with IREN and a partnership with the London Stock Exchange. Analysts note that the stock's slip on May 15 was modest, suggesting the market absorbed the block sale without major disruption.
The foundation's sale was the largest single-day disposal of Microsoft stock by a single entity in recent memory, but it's part of a deliberate strategy to turn billions of dollars in concentrated stock into cash for charitable giving. The trust hasn't signaled any further Microsoft sales, but the wind-down plan means more divestments are likely in the years ahead.
