Quote:
Originally Posted by Xenophon
Um... BZZZZZT!!! Actually, Apple was doing pretty well when Bill Gates invested in them. The Gates put in about $100 million, at a time when Apple was profitable, had no debt, and had...
...wait for it...
$5 BILLION in the bank! 
Bill Gates' "timely cash infusion" was a face-saving part of making a deal to settle outstanding patent disputes (Microsoft paid Apple something upwards of $1billion over a couple of years), promise to keep developing Office for the Mac for at least 5 years, and (oh yeah) invest $100 million in Apple.
Not a rescue, though.
Xenophon |
Well, the markets had a different opinion about Apple when Microsoft invested those money (of course it was not a rescue per se, just a vote of confidence that Apple will not go down). The company was in the red - again it does not matter if you have reserves in the bank, the markets want profitability and growth since reserves evaporate quickly otherwise, the stock was going nowhere - was pretty much flat from ~1987 to 1998, then it went up in the bubble, then back down to 1987 levels until 2003/4 and only then it took off.
I remember very well the financial commentary at the time and Microsoft move was clearly viewed as reassurance to investors.
Today Apple is an extraordinarily successful company, but then it was regarded as an also ran due especially to early decisions (in which Mr. Jobs had lots of input) not to license their OS. Of course nobody knew about iPods and mp3's then, how they will take the world by storm.
So my original comments were not meant as an insult and I respect Apple and Mr. Jobs a lot, however it does not mean that we gotta take his words as prophecy
As an aside, this episode (Microsoft putting money in Apple) is a good example of how quickly fortunes reverse in the market, since in the late 90's when Apple's stock was stagnant to down and Microsoft was going up and up exponentially, nobody would have bet that by 2008, Apple's stock will be about 10 (1000%) times higher, while Microsoft would be roughly about 50% lower from its highest level and just about where it was in 1998.