Gates Wagers $500m on Cable with Cox Stake

28 January 2002

Bill Gates invested $500 million in cable group Cox Communications last autumn, gaining 13.5m shares (a 2.25% stake).

The purchase by Gates’ personal investment vehicle Cascade was initially kept quiet, and only last week came to light because the Securities and Exchange Commission requested that the identity of the investor be disclosed.

The Microsoft supremo bought the shares at a time when Cox was one of a host of companies vying to win the hand of AT&T Broadband, America’s largest cable operator. Desperate to foil AOL Time Warner’s attempts, the software colossus offered to back the bids of Cox and Comcast Corporation (the eventual winner) [WAMN: 04-Dec-01].

Cox, however, stressed the investment was unconnected with the AT&T Broadband sale, adding that Gates would be a passive stakeholder.

The purchase is seen as a “bet” by Gates – for whom $500m is slightly less of a gamble than for most – that cable will become a major distributor of broadband web access, even though Microsoft had to take a $1 billion charge in October following a fall in the value of investments in telecoms firms and European cable operators.

News source: Financial Times