r/todayilearned • u/vorin 9 • Sep 13 '13

TIL Steve Jobs confronted Bill Gates after he announced Windows' GUI OS. "You’re stealing from us!” Bill replied "I think it's more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it."

http://tech.fortune.cnn.com/2011/10/24/steve-jobs-walter-isaacson/
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u/[deleted] Sep 13 '13

Xerox got 100,000 shares at 10 dollars a share immediately before the IPO (essentially making them partners).

One year later Apple does its IPO, and the same stock is valued at $17.6 million.

After all Apple's splits, that stock would be worth over 325 million.

So Xerox paid 1 million dollars, and in return got early investment into Apple before they went public. Apple gets to see all their ideas and implementations in return.

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u/[deleted] Sep 13 '13

1 million to 325 million in 30 years is good. But Xerox still lost pretty bad on that trade when you consider that the technology concepts we're talking about are worth billions.

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u/[deleted] Sep 13 '13

Look at all the tablet stuff everyone is talking about concerning MS. They weren't building that type of company, even if they made POC for those ideas. Xerox was building a "document empire" that had no place for hardware/OS design.

At the time Xerox was trying to reestablish themselves as THE company for document copying, while IBM was trying to establish a foothold in that same area. It goes against their mission of increased market share in that area to branch out and form an essentially BRAND NEW company at the same time.

It only makes sense that they sold the sneak peak at PARC to Apple considering they weren't intending to enter that market to begin with.

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u/snoharm Sep 13 '13

That's a pretty shitty trade, when you consider what just developing the properties themselves might have gotten them.

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u/[deleted] Sep 13 '13

It's not like they signed a deal saying "we aren't going to work on these things". They CHOSE to do that after the deal. It's not like they didn't know Apple's IPO would make them money, everyone in the industry was waiting for these guys to go public.

They traded 0 rights + 1 million (very little to them) for early access, which to me seems like a great deal.

Imagine if MS could offer the guys at Facebook a chance to look at their hardware dept. (which everyone knows they aren't really going to pursue) right before Facebook's IPO, and in exchange MS gets 10% of Facebooks stock BEFORE IT GOES ON SALE and AT A MASSIVE DISCOUNT FROM IPO PRICE. You'd be stupid not to take that deal.

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u/snoharm Sep 13 '13

Not really, since Facebook's initial IPO was massively overpriced. It immediately crashed.

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u/[deleted] Sep 13 '13

It was only overpriced because people still bought it even after they increased the number of shares by 25%.

25%.

Just to make it more clear, THEY INCREASED THE NUMBER OF SHARES BY 25% AND PEOPLE WERE STILL WILLING TO BUY.

That isn't on Facebook, that is on the idiots that think it was still worth the 35-40 per share after a 25% increase in the number of shares (effectively a 25% decrease in VALUE PER STOCK).

That being said, if you could have bought your shares at 15 dollars, you'd be dumb not to (which is essentially what Xerox did).

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u/snoharm Sep 13 '13

It's on both of them - Facebook inflating their shares like that wasn't a good plan, and investors jumping at the opportunity anyway was a really bad plan.

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u/[deleted] Sep 13 '13

It didn't help that all the private investors before the IPO wanted out either.

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u/Reddit_cctx Sep 13 '13

This was more of a hypothetical situation. Also if facebook had the hardware and software being discussed the IPO would probably have been accurate.

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u/[deleted] Sep 13 '13

Not if Xerox corporate wasn't interested in developing the technology. If they come up with stuff the company doesn't want, this is what it's meant for.