With a net worth of $64BN as of February 2020, Michael Bloomberg has made headlines recently after his Presidential Campaign has kicked into gear.
Let's take a look at his story and how he became so wealthy…
Bloomberg grew up in Medford, Massachusetts, a suburban city not far from Boston. From a young age, Bloomberg demonstrated the drive and persistence that would later manifest itself.
According to his mother, “He wanted to be the boss of whatever we were working on. He wanted to run everything.”
In high school, he knew he wanted out of his home town, citing New York as the place to be and emphasising the importance of becoming successful because “once you had a lot of money you could do things to improve the world.”
Bloomberg attended Johns Hopkins University, where he joined the fraternity Phi Kappa Psi. He graduated in 1964 with a Bachelor of Science degree in electrical engineering.
In 1966, he graduated from Harvard Business School with an MBA.
After he secured his MBA from Harvard, Bloomberg got a job in 1966 (the year England won the World Cup no less…) at Salomon Brothers. He worked in the so-called “cage” as a clerk processing trades at $9500 a year – the equivalent today of around $75K.
Bloomberg went on to become head of equity trading and sales for five years.
During his time at Salomon, Richard Levy, who was working for Bloomberg at the time, tells an interesting story regarding Bloomberg's ruthless work ethic…
Levy's grandfather had just died and the funeral was the next day – the same day that a large client was planning a heavy amount of trading.
Bloomberg said: “‘Would you mind having them change the funeral?'”
Levy refused. Under Jewish law, burial must take place within 24 hours of death.
Bloomberg apologised two hours later.
Some years later, when Levy’s son was born, the infant was admitted to intensive care and was facing a blood transfusion.
Levy called up work and said “I'm staying until he’s out of intensive care”
However, when he arrived home later, Bloomberg was calling: “Where have you been?” He asked Levy.
“I was in intensive care” Levy replied – to which Bloomberg responded:
“No other father took time off when their kid was born.”
Bloomberg apologised to Levy years later after he had kids of his own, but Levy sums it up here:
“He's the most brilliant guy I ever worked for, but he's the biggest bastard I ever worked for.”
Despite potential character flaws, Bloomberg demonstrated this brilliant with the moves he made in his career…
Bloomberg was a general partner at Salomon Brothers.
He lost out in a power struggle, and was effectively demoted. As he knew a fair amount about computers, Bloomberg was put in charge of Salomon's systems.
Bloomberg stayed just long enough to collect a $10MM cash buyout of his partnership stake in the firm as Salomon went public in 1981 in a merger with Philbro. That's the equivalent of around $28MM today. Now that's certainly enough to retire, but Bloomberg had no plans for that. He wanted more.
Using this money, Bloomberg set up a data services company named Innovative Market Systems (IMS) based on his belief that Wall Street would pay a premium for high-quality business information, delivered instantaneously on computer terminals in a variety of usable formats.
The company sold customised computer terminals that delivered real-time market data, financial calculations and other analytics to Wall Street firms. These machines later became known as Bloomberg Terminals.
In 1983, Merrill Lynch became the company's first customer, investing $30 million in IMS to help finance the development of “the Bloomberg” terminal computer system. As of 1983, IMS was selling machines exclusively to Merrill Lynch's clients; in 1984, Merrill Lynch released IMS from this exclusive deal.
The company was then renamed Bloomberg L.P. and by 1990, it had installed 8,000 terminals.
As of October 2015, the company had more than 325,000 terminal subscribers worldwide. These subscriptions cost $24,000 per year, discounted to $20,000 for two or more.
As of 2019, Bloomberg employs 20,000 people in dozens of locations.
The company has a revenue of around $10BN.
Therefore, Bloomberg, with his 88% stake, has climbed up the net worth ranking as the number of terminal subscribers has increased over the years.
Bloomberg stated: “There might be better traders than me, and there might be people who know more about computers. But there's nobody who knows more about both.”
There are other things of note:
- He was the mayor of New York City for 12 years, Bloomberg is one of just four individuals to have served that long.
- Since signing the Giving Pledge in 2010, Bloomberg has given away $8.2BN
- He has announced that he would sell his company if he were elected President.
Although perhaps this is unlikely…
Do you think he has a shot of becoming President?