How Bill Gate’s Microsoft Missed Out On $159B By Selling Apple Stock WAY Too Early – Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL)


While in many ways Steve Jobs and Bill Gates separately spearheaded the personal computer paradigm shift boom, the pair also had a personal relationship.

Their paths crossed directly on August 6, 1997, when Gates’ Microsoft Corporation MSFT 150 million dollars invested apple inc AAPLin exchange for shares in the company, which was on the brink of bankruptcy.

The two were known for publicly ridiculing and chiding each other, and they even had a series of ongoing legal battles along the way.

At the height of the browser wars with Netscape, Microsoft promoted Internet Explorer, sparking an antitrust lawsuit by the Justice Department. The Gates-led company was also embroiled in an ongoing legal battle with Apple, alleging that Microsoft stole the macOS look for Windows.

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Apple’s lawsuit was then dropped after Microsoft’s cash injection.

Amidst the legal tussle, there were agreements, including Jobs’ promise to make Internet Explorer the default browser and include it in the next Mac software releases. Gates, meanwhile, vowed not to sell Microsoft’s non-voting Apple stock for three years.

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The payment:

Microsoft received 150,000 preferred shares in return for its $150 million investment. These shares were convertible into Apple common stock at a price of $8.25 and were redeemable after three years.

Microsoft converted all of its stock into common stock by 2001, giving the Gates-led company about 18.1 million shares of Apple stock.

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By 2003, Microsoft had sold its entire stake in Apple for $550 million.

What if Microsoft stuck with its Apple stock? How much would they be worth today?

Well, Apple stock has split 2-for-1 once since the lockup ended, a 7-for-1 split in 2014 and a 4-for-1 split in 2020.

The first split would have given the company 36.2 million shares.

The second would have brought in 253.4 million shares.

The third, 1.031 billion shares.

Apple stock is currently trading at $157.56 – if Microsoft held its position to date, it would be worth $159.74 billion.

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Gates’ relationship with Apple isn’t over yet, so the billionaire remains exposed to the stock.

To pursue their charitable goals, when Gates left his position as CEO of Microsoft in early 2000, he and his wife Melinda established the Bill & Melinda Gates Foundation and the Bill & Melinda Gates Foundation Trust.

The Trust owns approximately 35 million shares in Berkshire Hathaway — or 2.69% of the entire company.

If 2.69% of the nearly $144 billion in Apple stock owned by Berkshire Hathaway belongs to the Gates Trust, the couple still owns $3.87 billion in Apple stock.

Photo: Courtesy of Joi Ito on flickr



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