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.
David Cummings on Startups 
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