1986 Fortune Article on Bill Gates and Microsoft’s IPO

Yesterday Fortune magazine republished their 1986 cover story on Bill Gates and the Microsoft IPO. The article, titled Inside The Deal That Made Bill Gates $350,000,000, does a great job covering the spirit and nuances about Bill Gates and Microsoft leading up to going public on NASDAQ. Here are a few notes from the article:

  • Bill Gates owned 45% of Microsoft after the IPO and was only 30 years old
  • Bill Gates had an informal rule that employees could sell no more than 10% of their holdings after the IPO
  • A price to earnings ratio of 10 at the time in 1986 was expected and was between what personal software companies and mainframe companies were trading at (now Microsoft trades at a 10.9 P/E ratio)
  • Oracle went public a few days before Microsoft (now Oracle trades at a 23.8 P/E ratio)
  • The stock started at $21/share and ended the day at $31.25

The articles touches on many more of the human elements of the IPO process including emotions, debates, and anecdotes. It is a great read for anyone interested in how an IPO works, technology history, and Microsoft.

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