Small business owners and future entrepreneurs take note. If you thought starting and growing a business was easy for some, look no further than the story of Steve Jobs and Apple. It is a story of innovation that is so drama-filled that film studios have made big money producing made-for-TV dramas around it.
Steve Jobs as well as his two partners, Steve Wozniak and Mike Markkula, started with barely anything. In order to raise funds, Wozniak sold his prized calculator for US$250 and Steve Jobs sold his Volkswagen bus for $1,500. From there, more investors came on the scene. There were differences in opinion, and eventually Steve Jobs left to start his own company called NeXT Computers after being forced out of the company.
Although they wouldn't admit it, Apple quickly figured out that they needed Steve Jobs. In a interestingly timed acquisition, Apple purchased Jobs' company NeXT computers, bringing Jobs back to the company where he would later become CEO working for $1 per year in compensation.
How valuable was his initial $1,500 investment? When the stock went public on Dec. 12, 1980, Jobs owned 7.5 million shares. With an IPO price of $22 per share that makes his $1,500 investment in 1976 worth $217 million in 1980! Of course, the share price only went up from there. Since then Apple has done three two-for-one stock splits, essentially turning that $22 IPO price into a split adjusted price of $2.75. Doing a bit of math, we can assume Jobs would have had 78,909,091 shares of Apple. At a $400 share price today, Steve Jobs would be worth about $31.6 billion if he held all of his initial shares versus an estimated $2.2 billion in Apple stock today (at $400 with 5.426 million shares of Apple). Of course, we all know that didn't happen. When Jobs was ousted out of Apple in 1985 he sold all but one share so he could still get the annual report. It was not until he came back in 1997 that he was rewarded additional shares in Apple.
In 1986, Jobs made what might be the best investment of his life. For $5 million, Jobs bought a small animation company run by George Lucas called Pixar. It was barely a company. Instead, it was a group of animators who were becoming interested in computer generated 3D animation instead of the traditional animation cells. Nine years later, their movie, "Toy Story," was released to critical acclaim. This proved to be the perfect time to make Pixar a publicly traded company. In the same year, Pixar issued an IPO on the public market. On its first day it priced at $22 per share (the same as the Apple IPO) making Jobs a billionaire for the first time.
Later, Pixar was sold to Disney in a deal worth $7.4 billion or $59.76 per share netting Jobs 138 million shares of Disney stock today worth approximately $4.3 billion. Along with the sale of Pixar, Jobs gained a seat on the Disney board and increased his net worth to more than $5.1 billion at the time making him the 43rd richest American according to Forbes Magazine.
The Bottom Line
Although Jobs recently resigned as CEO of Apple, he still holds seats on both the Apple and Disney board as well as creative influence on Apple products. Today, the largest part of his net worth comes from the sale of Pixar to Disney, with a total net worth of about $6.5 billion to $7 billion today. If he had not sold any of his Apple shares back in 1985, he would be worth an astonishing $36 billion placing him fifth on the Forbes "top billionaire list" compared to 110th today. Then again, money is not the key motivator for Steve.
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