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How Much Did Microsoft Lose By Selling Apple Stock?

It is well known that in August 1997, Microsoft bought $150 million of Apple stock as part of a lawsuit settlement. Microsoft sold it sometime in 2001 at about a 7% profit, earning about $10 million on the investment, but losing so much more as Apple become a serious and healthy competitor. Had Microsoft held onto the shares, what would they be worth today?

Since mid-2001, Apple shares are up 1,090.57%. Not knowing the actual sale date, Microsoft did leave somewhere in the neighborhood of $1.752 billion on the table. While it is “only” a little over 1 and a half percent of Apple’s current market cap, it is a nice amount of money for anyone to have (it could have paid off the Xbox 360 warranty charge). Microsoft could have invested that money better.

$150 million plus 7.07% = $160,605,000

$160.6 million plus 1090.57% = $1,912,114,948

(inspired by a ReelSmart post with some very strange math that claims the stock would somehow be worth over $50 billion, via Bink)

August 22nd, 2007 Posted by Nathan Weinberg | Corporate, Apple | 2 comments

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  1. Forget the Apple investment. What they should have done is buy Apple shares - or just about any other tech company - instead of buying back MSFT ones. With some 70B+ in that, even in the weakest alternative shareholders would have been way further ahead.

    Comment by Bob | August 22, 2007

  2. The math on this site may be even stranger.

    $150,000,000/$5/share = 30,000,000 shares

    2001 Value: 30,000,000*2[2000 split]*$10/share = $600,000,000

    2007 Value: 30,000,000*4[’00&’05 splits]*$130/share = $15,600,000,000

    Comment by stocker | November 16, 2007

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