Microsoft Once Saved Apple From Bankruptcy

Microsoft was founded by Paul Allen and Bill Gates back in 1975 with primary objective to develop and sell BASIC interpreters for Altair 8800 — spark that ignited microcomputer revolution. Redmond tech giant rose to prominence in mid-1980’s as main player in personal computer operating system market. Since 1990’s, y have visibly diversified from operating system market and me a number of corporate acquisitions, ir largest one being LinkedIn and Skype. Both se acquisitions were me much later in 20th century.

However, what many don’t know is that firm invested $150 million in Apple to save it from bankruptcy in 1997. company’s market capitalisation at that time stood at $149.68 billion, whereas, Apple was valued at merely $2.17 billion.

year 1997 was particularly memorable in technology world as for first time ever, Steve Jobs and Bill Gates announced that two companies h entered a historic agreement. In dition to this, Microsoft promised to support Microsoft Office for Mac while Apple agreed to make Internet Explorer its default web browser. company invested roughly $150 million for shares of Apple non-voting preferred stock. deal was fruitful for both technology giants as Apple received much-needed cash and Microsoft was able to alleviate an impression about ir monopolistic power.

Since n, Apple has come a long way toward becoming one of most valuable companies on planet.

This makes one wonder: What really became of Microsoft’s $150 million investment?

Reportedly, Microsoft’s $150 million investment scoured 150,000 shares of preferred stock, convertible to common shares of Apple stock at a price of $8.25, redeemable after a three year period. Notably, Microsoft h converted all of its shares into common stock by 2001. By 2003, Microsoft h sold its entire stake in Apple.

It’s quite a wonder to imagine what would have happened if Microsoft h held on to ir Apple shares till date.

Apple stock has been split twice on a 2-for-1 basis since agreement, once in June of 2000 and again in 2005. Assuming that Microsoft’s shares would have split only once, y would ideally in possession of 36.2 million shares. Since Apple was last tring at $604.59, Microsoft’s share would have been worth $21.86 billion.