Apple Computer Says It May Have To Go Public

The Wall Street Journal

June 30, 1980

WITHIN MONTHS OF ITS FOUNDING IN 1976, APPLE COMPUTER INC. BEGAN FRUSTRATING THE CONNOISSEURS OF YOUNG GROWTH-COMPANY STOCKS BY ITS REFUSAL TO GO PUBLIC.

APPLE NEVER NEEDED PUBLIC INVESTORS WITH ITS ROSTER OF VENTURE-CAPITAL BACKERS THAT INCLUDED ARTHUR ROCK (AN EARLY INVESTOR IN INTEL CORP.); HENRY SINGLETON, CHAIRMAN OF TELEDYNE INC., AND MEMBERS OF THE ROCKEFELLER FAMILY. IN FACT, PUBLIC MONEY STILL ISN'T WANTED BY APPLE, WHOSE SALES OF MICROCOMPUTERS FOR PERSONAL AND BUSINESS USE ARE EXPECTED TO EXCEED $150 MILLION THIS YEAR.

EVEN SO, GOING PUBLIC MAY BECOME UNAVOIDABLE. SAYS STEVE JOBS, ONE OF THE TWO COLLEGE DROPOUTS WHO FOUNDED APPLE: "WE MAY HAVE TO BITE THE BULLET AND GO PUBLIC IN LATE 1981 OR EARLY 1982."

THE REASON IS THAT FEDERAL SECURITIES LAW IMPOSES PUBLIC REPORTING REQUIREMENTS ON CONCERNS WITH MORE THAN $1 MILLION IN ASSETS AND 500 OR MORE SHAREHOLDERS. APPLE ALREADY HAS EXCEEDED THE ASSETS STANDARD, AND BECAUSE OF AN INCENTIVE PLAN THAT PUTS SHARES IN EMPLOYEES' HANDS, ITS 150 SHAREHOLDERS ARE GROWING IN NUMBER. APPLE IS CONSIDERING WAYS TO KEEP THE NUMBER DOWN, INCLUDING USING ITS CASH TO BUY BACK SHARES FROM EMPLOYEES WHO WANT TO SELL. BUT, JOBS SAYS, "THESE EFFORTS MAY TURN OUT TO BE MORE TROUBLE THAN THEY'RE WORTH."

A PUBLIC SHARE OFFERING BY APPLE PROBABLY WOULD GO OVER BIG. FOR MOST INVESTORS, THERE HAVE BEEN ONLY TWO EFFECTIVE VEHICLES FOR RIDING THE BOOM IN PERSONAL COMPUTING: COMMODORE INTERNATIONAL LTD. AND TANDY CORP. (THE RADIO SHACK CHAIN). PRICES ON THE SHARES OF BOTH HAVE ZOOMED IN THE PAST YEAR OR SO, COMMODORE'S FROM $7 EACH TO AS MUCH AS $59, AND TANDY'S FROM ABOUT $18 TO $44.