Ballmer Quits, Instantly Makes (Almost) $1 Billion

Microsoft CEO Steve Ballmer made $1 billion by quitting. The perennially embattled software boss said this morning he would retire within the next 12 months. At the market open, his 333.252 million shares were up 10% as investors cheered the end of the Ballmer era, a period in which the company returned more than $150 billion to shareholders and grew through the post-dotcom recession and the credit bubble collapse, yet utterly failed to get credit for anything. As my colleague Steve Schaefer reports, Microsoft shareholders have had a negative total return of nearly 17.6%, with the stock down 36%, according to data from FactSet, since the day Ballmer took over as CEO in January 2000.

"There is never a perfect time for this type of transition, but now is the right time," Ballmer said. His net worth now stands at $17.2 billion, up 13% since the March 2013 Billionaires List.

Microsoft shares sagged after the market open and closed up about two and a half bucks, pegging the one-day Ballmer Bump at $789 million. He would be closer to a clean billion ahead if he hadn't sold those 75 million shares in November 2010.

Follow the real-time wealth of Ballmer, Gates and dozens of other Forbes billionaires here.

Ballmer admitted in the release he is retiring earlier than he would have liked, and the news must have caused chagrin for his old friend Bill Gates; his blues are mitigated by the $943 million rise today in his Microsoft shares. Gates will be on the special committee being formed to select Ballmer's successor.

Here's the text of Ballmer's memo to employees. Only a month ago he announced a sweeping reorganization of the company around "devices and services." He will likely not be around to see that one through.

The memo suggests that the decision to quit rested with Ballmer (in likely consultation with Gates, still the company's largest shareholder). It wasn't as if an activist investor could have shaken up Microsoft's strategy or demand that more of its cash of $9.12 per share be returned to shareholders, a la Carl Icahn and David Einhorn's work at Apple . A new CEO would be free to push for far more dramatic changes than an activist investor could. Walter Pritchard at Citi Research says the most likely scenario would be for Microsoft to re-focus on enterprise (already 87% of company profits) and get out of consumer offerings like Bing, MSN and the Xbox. His back-of-the-envelope estimates say that if this 87% of profits gets a market multiple, the stock is worth $42. Also, with significant cash position ($9.12 per share, $0.88 of that in the US), a bigger dividend is also likely.

Check out this video highlight reel of Ballmer's craziest moments.

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