At what rate can a multi-billionaire liquidate his assets without significantly affecting the stock price?

Question

Let's consider three different billionaires: Jeff Bezos, Bill Gates and Warren Buffett. Now let's say the three of them (at different times) decided that they want to liquidate all their assets and get as much physical cash as possible. At what rate should they start selling their shares to end up with as much cash as possible?

I understand that this might depend on the stock trading volume but I can't really find the numbers.

I found in this article that Bill Gates sold $1.5 billion worth of Microsoft shares in 2015, so would that be the maximum? If not, then at what rate can each of those billionaire liquidate his assets without significantly affecting the stock price and thus affecting his own net worth?

Answer 1

One place to start would be to look at the OnBalanceVolume technical indicator.

This is by no means reliable, but it’s a place to start. It tells you how much of the volume hit the bid vs how much hit the ask.

On a very good day, MSFT on balance volume is 2 million shares out of ~34 million shares traded.

So presumably you could sell some relatively small percentage of the on balance volume, say 5 or 10%, without affecting the price too much.

If you sold 100,000 shares a day at $184 a share, that works out to $18million per day.

If you did that for 200 trading days per year that would be $3.6B per year.

Also note that large blocks are often traded in dark pools which may or may not be recorded in the volume. More than likely, he sold his shares in dark pools, in large blocks, to institutions, at the end of day closing price, over a period of months. If this were the cases, On Balance Volume tells you nothing. Still, it’s a place to start.