No one could have foreseen Apple’s meteoric rise to prominence in the four decades after its initial public offering (IPO) on December 12, 1980. Transforming modest resources into a fortune, an investment of $1,000 during the IPO would now be worth an astounding $1.5 million.
At its first public offering (IPO), Apple priced its shares at $22. Now, 43 years later, the tech behemoth has billions of users throughout the world, employs close to 160,000 people full-time, and brings in $383 billion annually.
Although the current market cap of $3 trillion makes it the most valuable public business in the world, getting there wasn’t easy. Despite tragic setbacks, incessant rivalry, and the premature passing of its renowned creator, Apple persevered.
But in the end, Apple was able to make history thanks to its visionary leadership and game-changing innovations. It resulted in once-in-a-lifetime gains for investors who rode along.
The Early Dark Days: Jobs Ousted As Apple Struggled
Though it has already made innumerable people rich beyond their wildest dreams, Apple stock was dull for a good chunk of its public life.
Apple appeared promising when it first entered the market in the 1980s, right before the personal computer boom. The Apple II computer, the company’s flagship product, was highly successful and helped drive rapid early revenue development.
But Apple quickly found itself at a disadvantage. In 1981, IBM made a bold move into the personal computer market, which led to a pricing war. Concurrently, Apple co-founder Steve Jobs and CEO John Sculley had a falling out. Jobs had recruited Sculley.
In a notorious boardroom coup in 1985, Jobs was removed from Apple. The departure of the company’s visionary technical wizard caused many to doubt its ability to survive in the long run.
Apple lagged behind competitors like Microsoft as the computing industry progressed in the late 1980s and early 1990s. The stock price hit new lows during this time due to poor sales.
Trust in Apple and its stock price both plummeted. Years of disheartening losses beset long-term investors.
The Return Of Jobs: How Apple Bounced Back From The Brink
As the mid-1990s rolled around, Apple appeared to be in a deep slump, but one man remained hopeful.
After shocking the computer world in 1996, Steve Jobs negotiated a deal that allowed him to recover ownership of the firm he established. Despite collecting dust for a decade, Jobs believed Apple still had unique promise.
Jobs was restored as CEO the following year, twelve years after his painful expulsion.
Invigorated by fresh ideas and talented individuals like renowned designer Jony Ive, Apple devoted the late 90s to reestablishing itself. As a result of cost reductions, the company was able to return to profitability, and the introduction of the iMac computers showcased the future of innovative hardware design.
But it wasn’t until 2001, with the release of the iPod, that Apple’s revival really took off. Though it wasn’t the first of its kind, Apple’s sleek and user-friendly music player became immensely popular. In the early 2000s, iPod sales surged thanks to its integration with the iTunes music store.
These were the first signs of Apple’s imminent dominance in the stock market, according to investors. However, the true influx of riches was not yet at hand.
The iPhone, Apple’s most groundbreaking and lucrative device to date, was unveiled in 2007. The iPhone was the one and only device that popularised the term “smartphone” by combining traditional phone features with mobile internet access and media playback.
Apple released a series of consumer technology hits that defined whole categories during the next decade. Competitors rushed to imitate Apple’s groundbreaking products, such as the iPad, Apple Watch, and AirPods.
After 2007, Apple stock proceeded on a completely unprecedented trajectory, propelled by these technologies. As of August 2018, Apple’s market valuation had reached $1 trillion, making it the first American firm to achieve this feat. To reach $2 trillion, it took two years longer than the others.
Massive windfalls have been enjoyed by investors. Although there is no certainty that future gains will be similar to past performance, Apple’s reputation is only growing.
Legacy Of Innovation Fuels Ongoing Success
Steve Jobs passed away from cancer in 2011, at the young age of 56. He may no longer be directly responsible for Apple’s direction, but the legacy he left behind ensures the company’s continued success.
Cook, who has been Apple’s CEO since 2011, recently said that Jobs’ ingrained innovation culture is the reason for the company’s continuous success. Even though he’s been a tough act to follow, Cook has led Apple down a very profitable road in the past decade.
Apple is now unrivaled in the computer industry, despite appearing to be on the verge of losing ground to Microsoft not long ago. Its iPhones, which combine state-of-the-art user experiences with premium brand prestige, continue to be valued as high-end status symbols worldwide.
Apple has also been on a corporate rampage like never before in terms of finances. Profit margins continue to be opulent in comparison to competitors, which has led to yearly earnings that surpass $380 billion.
Riding Apple To Impossible Riches: The $1,000 IPO Investment Now Worth $1.5 Million
Think back to Apple’s first public offering (IPO) in 1980: nobody predicted the company would have such a meteoric rise to prominence. On the contrary, early investors took a huge risk by purchasing shares in a company that had yet to prove itself.
Apple stock, however, was an investment unlike any other for those who were prepared to hold on through thick and thin. After accounting for stock splits, the initial public offering (IPO) price of $22 for one Apple share is equivalent to around $0.10 in today’s terminology.
Thus, a hypothetical $1,000 investment during the 1980 IPO would currently be worth more than $1.5 million, a return of 150,000 percent that would turn that amount into a million dollars.
But if you had invested the same $1,000 in the Nasdaq index as a whole over the same nearly 43-year period, you would currently have $75,300. A price of $35,600 would correspond to the S&P 500.
However, the recent acceleration of Apple’s share price growth is even more remarkable. Apple stock keeps setting new records, but it’s important to remember that past results don’t necessarily mean future performance.
The world’s love for Apple isn’t going anywhere, so its share price has doubled since mid-2020, when it was near $120. With trillions of dollars sitting on the balance sheet, it’s no surprise that the company’s valuation is likely to continue its record-breaking trajectory.
Therefore, Apple is still a unique narrative for those who prefer to buy and hold investments. A daring wager on an ambitious digital firm culminates in one of the most exhilarating rides in corporate America’s history. The rewards for those who stuck around have been more than anyone could have imagined.