Many of us would use time travel to go back and invest early in companies like Apple, Microsoft, and Amazon. In 1986, no one knew the names Microsoft or Bill Gates. Today, Gates is an inspiration to millions, and Microsoft is now a $1 trillion company. Yet he’s not the only earning big bucks from the company. Early investors are now some of the wealthiest people in the country…
Bill Gates and Paul Allen Found Microsoft
While many believe Gates is the sole founder of Microsoft, he actually co-founded it in 1975 with his good friend, Paul Allen. The two became extremely close while in high school due to their shared love of computer science. In college, Gates dropped out of Harvard to study coding independently, set on starting a company. Allen, of course, joined him, helping found Microsoft.
Over $1 Million In Sales
Just three years after its founding, Microsoft earned over $1 million in sales, all before becoming a publicly-traded company. In fact, it would stay private for eight more years! During this time, Gates and Allen worked with insiders, building the brand. Furthermore, Gates wanted to make sure that everyone understood that they were in charge of the initial public offering (IPO).
Around 1985, Gates finally accepted that the idea of an IPO would create a better environment and earning for shareholders. So, On March 13, 1986, Microsoft went public. Share prices opened at $21 that morning. However, by the end of the day, the stock price had risen to a whopping $35.50. That’s nearly $83 today! In the snap of a finger, Gates and Allen had become millionaires. On that day, Allen told the Seattle Post, “I’m pretty happy.” We can only imagine!
Ups and Downs
Of course, as Microsoft continued to grow, so did the earnings. At the age of 39, Gates became the world’s richest man alive. Still, he didn’t slow down until his retirement at the age of 58 in 2014. Over the years, Microsoft’s released some of the most successful products of all time, like the Windows Operating System and the Xbox. Today, Gates’ properties alone are worth $12.9 billion, while his net worth sits at $103.4 billion. Paul Allen, unfortunately, passed away in 2018.
While Microsoft has certainly made Gates and early investors rich, the company’s also experienced some struggles. Do you remember the Zune music player or the Vista edition of Windows? Probably not. They both massively failed and cost the company millions. Still, they’ve managed to weather the storms. In fact, they’re still fighting one war: Google consistently tops Microsoft’s search engine (Bing) and web browser (Microsoft Edge).
Early Investors’ Gains
So, how much would a $1,000 investment in Microsoft in 1986 be worth today? Well, those shares would sell for just over $1.6 million today! So, what can this teach current investors? Always lookout for the new thing! Talk with your friends, family, co-workers, and, most importantly, your finical advisor, as well as research, what the emerging industries are. Perhaps you could make the next incredibly lucky investment!
Sources: CNBC, InvestmentGuru, TradingBlvd.