Analyzing the Wealth of Steve Jobs from US$1500 to US$8.3 billion

From a humble beginning, Steve Jobs started Apple with Steve Wozniak and Mike Markkula. Jobs invested his Volkswagen bus valued at $1,500 and Wozniak invested his calculator, valued at US$250.

From the investment of US$1,500, Steve Jobs became every body’s hero and a billion in America. But before then, he ‘stayed hungry and stayed foolish’. When Apple began to expand, the company looked for an experienced executive to help manage its expansion. So many people came on Board as well as investors. Steve Job lured Sculley John in to Apple away from Pepsi- Cola by asking him whether he would like to sell sugar water for the rest of his life or join him to change the world.  Whiles most of Jobs’ employee thought he was too temperamental, he stood by his principles and gets the job done at all times.

An internal power struggle at Apple and redundancies at the time made Sculley relieved Jobs of his duties. The Co-founder was fired.  To Steve, "The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life."

Jobs owned 7.5 million shares when they went public and with an IPO price of $22 per share that makes his $1,500 investment in 1976 worth $217 million in 1980.

Steve Jobs left Apple to start NeXT Computer in 1985 with $7 million and when things were going bad, the Billionaire Ross Perot invested a lot of money in the company.

Steve later bought The Graphic Group (Pixar) for $10 million of which $5 million was given as capital. After some time, Jobs announced that Disney had agreed to buy Pixar which was worth about 7.4 billion. This transaction made him the largest individual shareholder with about 7% stock holdings in the company. The sale of Pixar to Disney brought the largest impact to his net worth valued at above $7 billion today.  Along with the sale of Pixar, Jobs gained a seat on the Disney board and increased his net worth to more than $5.1 billion from a worth of 4.3 billion representing 138 million shares in Disney.

Apple Inc. bought NeXT Computers for US$429 million in 1996 and that was how Steve Jobs came back to his company. At the 2000 Macworld Expo, Jobs became the permanent CEO of Apple Inc. but in August 2011, Jobs resigned as CEO, but remained at the company as chairman of the company's board and director on Disney board.

Money is not the key motivator for Steve Jobs but he died a Billionaire (has a net worth of $8.3 billion as of March 2011), a great contributor to the American Capital market and an inspiration to young entrepreneurs or business owners.

Courtesy: Market Watch, Wikipedia, Investopedia, Forbes and Apple Inc.

History of Initial Public Offers (IPO) in the Ghanaian Capital Market.

Initial Public Offering which is popularly known as IPO comes about when companies issue new shares to the public to purchase as a source of raising capital. Ghana has a wonderful history of IPOs and since the inception of the Ghana Stock Exchange (GSE), there have been so many IPOs with an impressive performance in the market. Meanwhile others were just so bad and despite their impressive subscriptions, they traded badly on exchange.

On 12^th November, 1990, Accra Brewery Limited (ABL) made a provisional listing on the Ghana Stock Exchange, making it one of the earliest companies to be listed on the Ghana Stock Exchange. This company and others existed before the inceptions of the GSE Public Limited Liability Companies hence were initially given provisional listing status before the formal listing. ABL made its formal listing on 20^th December, 1991 (Source; GSE Research Dept.).

One IPO listing was by SPPC and this was from December to February 1992. Eight (8) million shares were offered but only 4.2 million shares were sold to raise an amount of 630 million old cedis (GHC 63,000). Mechanical LLoyd Company Ltd (MLC) also offered 11 million shares as IPO at 50 old cedis (0.05 pesewas) per share from December 1993 to February 1994 and only 9.36 million shares were sold which raised an amount of 468.16 million old cedis (GHC46,816). Looking at these historical trends, it is obvious that early IPOs were cheap but subscriptions were not impressive. In January 1995, HFC Bank stocks were oversubscribed when they made a placement.  Shares offered were 11.35 million at 100 old cedis (0.10 pesewas) and 13.10 million shares were sold to raise about 1,315.45 million old cedis (GHC 131,545). Most of the time, shares of this nature were patronized by foreigners because the investment community of Ghana was small by then. Aside the HFC placement, SSB (now known as SG-SSB) IPO in 1995 was also oversubscribed. Many companies like ALW, UTC, PZ, EIC, FML made primary issues which were not necessarily IPOs. In 2006, Ghana Commercial Bank (GCB) issued and IPO of 49.50 million shares but 68.44 million shares were subscribed. This oversubscription set the pace for most IPOs and the investment community of Ghana especially the youth, took advantage of them. Initial Public Offers of Camelot (CMLT), Produce Buying Company (PBC), Sam Wood Ltd (SWL), Cocoa Producing Company (CPC) followed and in 2004 alone, four (4) Companies (CLYD, BOPP, CAL & SPL) listed IPOs on the GSE. But how well do the trade on the Exchange?

About two year ago, Ecobank Transnational Incorporated (ETI) offered an IPO that was largely subscribed meanwhile these shares are facing liquidity problems as at now in the market. Share price of ETI has fallen below its IPO price and shareholders are not happy at all.  UT Bank entered the market with an IPO which was also oversubscribed but the question still remains, do IPOs perform well in the market. Shares of UT bank had so many problems when it started trading in the market but is currently bouncing back.

The most recent IPO issued in the market is the shares of Tullow Oil, just weeks ago and these were undersubscribed. Does it mean that the investment community is no longer having confidence in IPOs or it was due to the costly price of this particular offer? As an investor, you must find out because this can inform your investment decision.