Bill Gates Buys Stake In AutoNation

Microsoft Corp. Chairman Bill Gates has a 5½ percent stake in dealership chain AutoNation Inc., according to a disclosure filed Monday, July 21, with the Securities and Exchange Commission.

In betting on auto dealerships, Gates joins fellow technology pioneer Michael Dell. Dell announced plans in May to team with former Sonic Automotive President Jeffrey Rachor to start a joint dealership venture. Dell is the founder and CEO of personal computer giant Dell Inc.

The stake makes Gates AutoNation's third-largest shareholder, according to Bloomberg.

But he's far behind the largest shareholder: Hedge fund manager Edward Lampert. As of its latest SEC filing on May 28, Lampert's firm owned 39.9 percent of AutoNation. Lampert is best known for acquiring troubled retailer Kmart out of bankruptcy and merging it with Sears Holdings Corp.

Cascade Investment LLC, a fund controlled by Gates, owns 2.9 percent of AutoNation. The Bill and Melinda Gates Foundation owns a 2.6 percent stake.

As of mid-afternoon today, AutoNation shares were trading at $9.10 on the New York Stock Exchange. That makes Gates' 9.9 million-share stake worth more than $90.1 million. AutoNation's shares have climbed by almost $1 a share since Gates' share was disclosed just after 4 p.m. Monday.

AutoNation, of Fort Lauderdale, Fla., has 321 vehicle franchises in 15 states with a range of U.S., Asian and European automobile brands. AutoNation ranks No. 1 on the Automotive News list of the top 100 dealership groups in the United States with retail sales of 328,963 new vehicles in 2007.