On this day in business and market history...
It's said that a journey to a $500 billion market cap begins with a single IPO. Well, maybe nobody actually says that. But in Apple's (AAPL +0.72%) case, it came true 32 years after its highly anticipated initial public offering, which took place on Dec. 12, 1980. That day, a flood of investor interest that would be familiar to any dot-com-era veteran produced one of the largest first-day market caps up to that point in history. Apple's $1.6 billion first-day market cap trounced the last large IPO of the pre-PC era, a $200 million debut by satellite communications company Comsat 15 years earlier. Apple raised $110 million on sales of 4.4 million shares, which amounted to about 7.4% of the 54.2 million shares then outstanding.
Apple's closing price of $28.75 made its founders quite wealthy -- 25 year-old Steve Jobs wound up worth $217 million thanks to his 7.5 million shares, and Steve Wozniak's net worth ballooned to $115 million thanks to the 4 million shares he held. Jobs never saw the full potential of this stock, though, as he sold all but one of his Apple shares on leaving the company in 1985 after losing a bitter power struggle. Had he held them for the next 25 years, through three two-for-one stock splits, his net worth would have been north of $19 billion in 2010 -- not counting his later Pixar windfall. By the time Apple first reached a $500 billion market cap in spring 2012, Jobs' original stake would have surged to $31.5 billion, enough to make him the ninth-richest person in America that year without accounting for his other holdings.
Apple's 1980 fiscal year, which ended in September, resulted in $118 million in revenue and $11.7 million in profit. Let's take a look at how much Apple has grown since its IPO:
|
Year |
Market Cap |
Revenue* |
Net Income* |
Growth from IPO (market cap; revenue; profit) |
|---|---|---|---|---|
|
1980 |
$1.6 billion |
$118 million |
$11.7 million |
N/A |
|
1985 |
$1.2 billion |
$1.8 billion |
$72 million |
(25%) ... 1,425.4% ... 515.4% |
|
1990 |
$4.6 billion |
$5.7 billion |
$500.6 million |
187.5% ... 4,730.5% ... 4,178.6% |
|
1995 |
$4.7 billion |
$11.4 billion |
$167 million |
193.8% ... 9,561% ... 1,327.4% |
|
2000 |
$5.2 billion |
$6.6 billion |
$408 million |
225% ... 5,493.2% ... 3,387.2% |
|
2005 |
$63.1 billion |
$16.2 billion |
$1.6 billion |
3,843.8% ... 13,628.8% ... 13,575.2% |
|
2010 |
$294.1 billion |
$76.3 billion |
$16.6 billion |
18,281.3% ... 64,561% ... 141,780.3% |
Source: Wolfram Alpha. *Revenue and net income calculated on a calendar-year basis by Wolfram Alpha.
Shareholders didn't see many rewards for holding on during the first two decades of Apple's public life. While the Mac maker did grow from a $1.6 billion market cap to a $5.2 billion market cap, rival Microsoft (MSFT 0.42%) grew from essentially nothing (it didn't go public until 1986) to become worth $311 billion, even after a steep drop from a maximum valuation of more than $600 billion at the end of 1999.
Dedicated Apple shareholders had the last laugh, though: From 2000 to 2010, Microsoft's market cap shrank by 25%, while Apple's grew by more than 5,500%.
