Microsoft co-founder Paul Allen revealed in his autobiography "Idea Man" that after undergoing treatment for Hodgkin's lymphoma in December 1982, he overheard Bill Gates and Steve Ballmer discussing diluting his shares through a stock option issuance, citing his recent lack of contributions.

Allen confronted the two in their office, stating that this exposed their true character; they later apologized, but the dilution plan was halted, and Allen decided to leave the company. At that time, he held about 36% of the shares, and Gates offered to buy out all shares at $5 per share, which Allen refused, stating he wouldn't discuss anything below $10 per share. Gates rejected this price, and the deal fell through.

Allen did not sell any shares when he left Microsoft; in March 1986, Microsoft went public at $21 per share, and the stock price continued to rise, with Allen's retained original shares ultimately making him a billionaire, allowing him to purchase assets such as sports teams, aerospace, and yachts.

In the book, Allen wrote that Gates' conservatism actually benefited him; had Gates been willing to pay closer to his asking price, he would have sold his shares too early. The two met at Lakeside School in Seattle, dropped out together to start Microsoft, and their early equity shifted from nearly equal to Gates having the advantage.

This event occurred during the early days of the personal computer wave, as Microsoft's business was taking off; the failed buyout allowed Allen to fully retain his early shares, transitioning his capital from a one-time low-price liquidation to a long-term hold to enjoy subsequent growth.

Allen stated that trust was shattered, and after leaving, he focused on other ventures; Gates responded by saying that while he remembers many events differently, he values his friendship with Allen and his contributions to technology and Microsoft.

Source: Public Information