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On August 6, 1997, this investment is considered one of the most ingenious deals in tech history. At that time, Apple, which was in trouble, received $150 million from Microsoft. Sounds like a bailout? Actually, it was a carefully orchestrated game.
There are three key points to the deal: Apple had to drop its lawsuit against Microsoft for copying the Mac interface in Windows; Microsoft promised to continue developing Office for Mac for at least five more years — which was crucial for Apple's ecosystem; Apple also had to set Internet Explorer as the default browser on Mac.
How was the money spent? Microsoft bought non-voting preferred shares, 150,000 shares, with a conversion price of $8.25 per share. This design seemed to protect Apple but actually gave Microsoft flexibility. Between 2000 and 2001, Microsoft converted all shares into 18.1 million common shares of Apple.
Then came the moment of witnessing a miracle. Between 2003 and 2005, Microsoft gradually sold off its Apple stock, cashing out $550 million and netting $400 million. The return on investment was nearly 267%.
If there’s any regret, it’s that they sold too early. Today, the value of these stocks has skyrocketed to $200 billion. Ironically, the Apple that was rescued by this investment has now surpassed Microsoft in market value. History always loves to play jokes.