What ever became of Microsoft’s $150 million investment in Apple?

“In August of 1997, Apple and Microsoft decided to put the past behind them and focus on the future. At that year’s Macworld event, Steve Jobs and Bill Gates announced that the two companies had entered into a historic agreement. In addition to agreeing to a broad patent cross-licensing agreement, Microsoft promised to support Microsoft Office for the Mac for 5 years while Apple agreed to make Internet Explorer the default search engine on the Mac,” Yoni Heisler reports for TUAW. “Microsoft also promised to invest approximately $150 million for shares of Apple non-voting preferred stock.”

“What ever became of Microsoft’s $150 million investment?” Heisler reports. “Microsoft’s $150 million investment netted the company 150,000 shares of preferred stock, convertable to common shares of Apple stock at a price of $8.25, redeemable after a three year period. By 2001, Microsoft had converted all of its shares into common stock, netting the company approximately 18.1 million shares.”

“But by 2003, Microsoft had sold its entire stake in Apple,” Heisler reports. “At the close of trading on Monday, shares of Apple were trading at $604.59. If Microsoft still had their shares, they’d be worth $21.86 billion.”

Read more in the full article here.

MacDailyNews Take: A bit of clarification:

The day before Steve Jobs’ Microsoft announcement, Apple had a market cap of $2.46 billion. Microsoft’s $150 “investment” in non-voting Apple was actually the first payment for the settlement of a lawsuit (Apple v. San Francisco Canyon). The use of the word “investment” was symbolic; a bit of marketing fluff from the master, Steve Jobs.

You see, Microsoft had been caught with thousands of lines of code for video acceleration used in Windows that had come directly from Apple’s QuickTime for Windows’ copyrighted code.

The “investment” was an initial payment for other “substantial balancing payments” that would be spread out over then next few years, then Apple CFO Fred Anderson said at the time. In fact, the investment was just an initial payment for other “substantial balancing payments” that would be spread out over then next few years, then Apple CFO Fred Anderson said at the time, as reported by David Morgenstern.

The total settlement figure remains undisclosed. It is estimated to have been upwards of $1 billion.