An 'Orderly' Debut For Apple

By Robert J. Cole
The New York Times

December 13, 1980

Apple Computer came to market yesterday and won an enthusiastic, but orderly, reception from investors. Five million shares of the eagerly awaited issue were sold at $22 a share. They jumped immediately to $29 in the over-the-counter market, peaked at $29.25 and ended the day at $28.75.

Stockbrokers said that not everybody was able to buy the shares - many successful buyers had their orders in months ago - but described the $110 million sale as ''orderly.''

Trading after the sale involved only 20,500 shares, suggesting that most buyers were not looking for a quick profit. Those investors who bought in hopes of a fast return were disappointed. Morgan Stanley & Company and Hambrecht & Quist, the two Wall Street houses that brought the issue to market, took extreme caution to prevent the kind of run-up that has characterized almost every other hot issue in the last few months.

By contrast, when Genentech, the gene-splicing company, was brought to market at $35 a share two months ago, the stock more than doubled at one point the first day to $86, before closing at $71.25. It stood yesterday at $39.

Largest New Issue Since Comsat

Apple was the biggest new issue to be sold to the public since the $200 million offering more than 15 years ago by Comsat, the Communications Satellite Corporation. It was also the first new issue to be sold by Morgan Stanley in many years, a prestige house that deals only with such blue-chip clients as American Telephone and Telegraph, J.P Morgan and Standard Oil (Ohio).

Although many investors who tried to buy Apple were unsuccessful, brokers were particularly careful not to create false hopes that inve stors cou ld make a killing.

At the same time, a major effort was undertaken to make certain that even though there would not be enough to go around, the amount eventually sold would satisfy enough of the demand to prevent the surges that have become almost commonplace with every hot issue.

Underwriters initially planned to sell 4.5 million shares but later raised the total to 4.6 million. They eventually sold 5 million to meet demand. The original offering price was estimated at between $14 and $17, but was raised to between $20 and $22, also because of the demand.

Company Sold 4.4 Million Shares

All but 600,000 shares were sold by the company, largely to finance operations. The rest was sold by investors not in management. The total sold represents 7.4 percent of the 54.2 million shares outstanding.

The Securities and Exchange Commission is quietly investigating sales of low-priced hot stocks in the Denver area, and is known to have opened a separate investigation of other hot issues sold nationwide, including Genentech. It is also known to be monitoring Apple as well, but only on a routine basis.

Although there are no indications of any unusual S.E.C. interest in Apple, sources close to the Government agency pointedly noted yesterday that the S.E.C. had already brought fraud charges against the American Leisure Corporation, an Atlantic City casino developer, and its Denver broker, Blinder, Robinson & Company.

In that case the S.E.C. charged that Blinder's salesmen untruthfully told clients that the stock would double or triple in value after they bought it. If the S.E.C. is successful in that suit, it hopes to give the stockholders their money back.

Stock Unavailable in 20 States

Apple's debut was not without its difficulties, however, although they were more an embarrassment than a problem. In Massachusetts, normally a state that presents no difficulties in approving the sale of new issues, officials prevented Apple's sale as ''too risky.'' No effort was even made to offer the stock in Illinois - home of many eager buyers - because of strict state laws on new issues. Because of poor sales prospects or regulatory difficulties, the stock was not offered for sale in 20 states, including Washington, Wisconsin, Michigan, Missouri and Iowa.

In Austin, Tex., Charles Milam, director of securities registration, said Texas had approved Apple's sale locally after extensive review, but remarked, ''It was a close call.''

Nautilus Fund of Boston, which has held 360,000 shares of Apple at an average cost of $1.63 each, estimated that the fund's value, now around $26, might rise to between $30 and $35 a share.

Apple reported profits for the fiscal year ended Sept. 26 of $11.7 million on revenues of $118 million.

Illustrations: photo of Stephen G. Wozniak and Steven P. Jobs table of Apple's largest shareholders

Copyright 1980 The New York Times Company