From Fired to Empire

Michael Bloomberg, born in Massachusetts in 1942, spent fifteen years at the investment bank Salomon Brothers, rising to partner and ultimately overseeing its information systems. When Salomon Brothers was acquired by Phibro in 1981, he lost his position and left with a payout of roughly ten million dollars for his partnership stake. Rather than retire, he founded a company the very same year together with Thomas Secunda, Duncan MacMillan and Charles Zegar, calling it Innovative Market Systems. The idea was as simple as it was radical: finance professionals needed fast, reliable access to prices, analytics and comparable data on a single screen.

The Bloomberg Terminal

The first machine, later simply known as the “Bloomberg Terminal,” delivered bond data and calculations at a depth the market had never seen. Its first major client was Merrill Lynch. The company was renamed Bloomberg L.P. in 1986, and by 1991 around 10,000 terminals were already installed. Today more than 325,000 subscribers worldwide rely on the system, which costs roughly 24,000 to 27,000 dollars per user per year depending on the contract. The terminal became the de facto standard on trading floors and at banks, asset managers and regulators – and the foundation of a wider company spanning a news agency, television and data services.

Politics and Philanthropy

In 2001 Bloomberg was elected Mayor of New York City, governing for three terms from 2002 to 2013. During those years he largely stepped back from day-to-day operations at his company, returning afterward. Bloomberg is today a multibillionaire; Forbes estimates his fortune in the hundreds of billions of dollars, since he still holds the overwhelming majority of Bloomberg L.P. Through his foundation, Bloomberg Philanthropies, he reports having given away tens of billions of dollars over the years, including a one-billion-dollar gift to his alma mater, Johns Hopkins, to make most of its medical students tuition-free.

BMI Take

For investors, Bloomberg’s story is above all a lesson in infrastructure: the largest and most durable value came not from a spectacular trade but from a tool that other market participants need every single day. Anyone who wants to understand how information itself becomes a tradable good and a business model will find the Bloomberg Terminal the textbook example. Retail investors generally don’t use the terminal – but the principle behind it, reliable data and comparability, is also the foundation of every sound investment decision you make on your own.