How Michael Bloomberg's bright idea transformed Wall Street

Michael Bloomberg
Credit: Carolyn Kaster/Associate Press 

Four years ago Michael Bloomberg paid £16m for a house once owned by the writer George Eliot on Cheyne Walk in Chelsea. The five-bedroom house features a painting by St Paul's Cathedral artist Sir James Thornhill, a 91ft garden and views of the Thames.  

Yet the 77-year-old is unlikely to have much time to spend gazing out at the river anymore after ending weeks of speculation on Sunday by seeking to become the Democrats' US presidential nominee

"We cannot afford four more years of President Trump's reckless and unethical actions," said the 5ft 7 New Yorker, who is said to have exaggerated his height on his driver's licence. "The stakes could not be higher." 

His run marks the biggest gamble yet in a zig-zagging political career in which Bloomberg has twice served as Republican mayor of New York City, followed by a third term as an independent after controversially rewriting the city's electoral rules. 

He has twice considered standing for president as an independent, but is now running for the Democrats after deciding that none of the party's prospective candidates is good enough to beat Donald Trump. 

While both businessmen are New Yorkers, their rise to the top has been very different. Trump can thank inherited wealth, property and reality TV powered by maniacal self-belief, but Bloomberg turned a $10m payout after getting fired into a company with an estimated turnover of $10bn that has upturned the financial information industry.

His rise from Wall Street trader to technology and media magnate was powered by a slightly different sort of belief in his own exceptionalism: "I'm not the smartest guy in the room, but nobody's going to outwork me," he told the New York Times in 2017. 

Born on Valentine's Day 1942 to a dairy company accountant father, William, and housewife mother, Charlotte, the young Jewish Michael Bloomberg reportedly sold Christmas wreaths door to-door to pay for summer camp.

After studying at Johns Hopkins University in Baltimore and Harvard Business School, he got a job at the risk-taking bond trader Solomon Brothers where he worked furiously hard, reportedly stripping down to his underwear to count bond certificates in a boiling hot bank vault.

Bloomberg moved to the equities desk and was made partner in 1972 before being forced into an IT division amid an internal power struggle. It was seen as a demotion - but what he learned there sowed the seeds for his fortune. 

Fired two years later, in 1981, he spied an opportunity in selling financial information such as stock and bond valuations, as well as the software to analyse them. 

Years before the internet and in the middle of a recession, he took his $10m severance pay and set up Innovative Market Systems, which developed computer terminals to view and analyse the data, selling them to clients such as investment bankers. 

Michael Bloomberg playing a round of golf with Donald Trump in 2007 Credit: Getty images 

Using better data and slicker systems than rivals such as Reuters, the renamed Bloomberg LP grew rapidly and Bloomberg terminals are now an essential part of the global financial services machine, transforming the industry. 

From about 10,000 at the start of the decade, there are now thought to be more than 350,000 subscribers who each pay about $24,000 a year for a Bloomberg terminal -  a tax on Wall Street of sorts, long before Bloomberg has the keys to White House.  

Such is their place in financial history that the legendary bond trader Bill Gross donated his old Bloomberg terminal keyboard to the Smithsonian's Museum of American History, while Bloomberg phoned him to say he could keep his three Bloomberg terminals for free. "I didn't want to lose my Bloombergs," Mr Gross told the Financial Times this year. "It was a nice touch." 

Bloomberg remains well ahead of its competitors with just under a third of the global financial data market, compared to 22pc for rival Refinitiv's Eikon terminal. The London Stock Exchange's recent £22bn takeover of Refinitiv (spun out of Thomson Reuters) is a sign of just how important that market has become. 

Bloomberg started branching into news in 1990 to give terminal subscribers extra information - with its ever-ambitious founder soon keen to make it the "world's most influential source of news". The tension with his presidential ambitions was laid bare when the company said it would maintain its policy of not investigating its owner - even as he runs for president. 

Still privately held, Bloomberg does not disclose sales figures. But the founder Bloomberg bought back Merrill Lynch's 20pc stake for $4.5bn in 2008 - suggesting it was then valued at about $22bn. He owns some 90pc of the company, and Forbes ranks him as the eighth-richest American worth more than $50bn. 

It has not come without challenges. Bloomberg alienated clients in 2013 when it emerged its journalists had regularly accessed details about terminal subscribers, such as what functions they had used, to help them get stories. 

The major breach of ethics - described by the Bank of England as "reprehensible" -  pushed some towards a rival service called Symphony. Bloomberg is also under growing threat from cost-cutting across the finance industry the rapid pace of change in technology. 

Whether its founder will be around to meet those challenges remains to be seen. The fortune he made from the business helped him launch his $74m first New York City mayoral campaign in 2001, leading to a nine-year tenure that was praised for its success in cutting crime and banning smoking in public.

That same fortune will now help bankroll his first bid for presidency, where he wants to provide more affordable medical care and cut pollution from fossil fuels.  

Known for questionable jokes ("I get slapped a lot but I get laid a lot, too", according to a New Yorker profile ), major philanthropy and lavish, mermaid-featuring parties, Bloomberg is in many ways well-matched to his opponent Trump.  

Asked in 2017 by the New York Times what he would have done differently, Mr Bloomberg gave a typically confident response: "Given the way things turned out, nothing." Will he say the same by this time next year?