The $22 Billion What-If?
June 4, 2010 2:26 PM   Subscribe

Afraid that Jobs' wild spending and Woz's recurrent "flights of fancy" would cause Apple to flop, Wayne decided to abdicate his role as adult-in-chief and bailed out after 12 days. Terrified to be the only one of the three founders with assets that creditors could seize, he sold back his shares for $800. An interview with Apple Computer co-founder Ron Wayne (he also designed Apple's first logo). Had he held out, his shares today would be worth $22 billion.
posted by Chinese Jet Pilot (49 comments total) 11 users marked this as a favorite
 
I saw this article, and it hurt me to read it. It's like Wayne held a piece of coal that would one day become the Hope Diamond.
posted by reenum at 2:31 PM on June 4, 2010 [4 favorites]


"I felt certain the company was going to be successful; that wasn't the question. But how much of a roller coaster was it going to be? I didn't know that I could tolerate that kind of situation again. I thought if I stayed with Apple I was going to wind up the richest man in the cemetery."

It was inevitable that hindsight was going to make him a remorseful man, but I completely sympathize. Fascinating guy. Thanks for the post!
posted by churl at 2:35 PM on June 4, 2010


Interview link is broken in a way that I wasn't able to easily determine how to fix...
posted by rollbiz at 2:35 PM on June 4, 2010 [1 favorite]


Link isn't working for me. I think this is it.
posted by grouse at 2:35 PM on June 4, 2010


Try clicking it again. The first time I tried to follow it, it led me to https://secure.www.metafilter.com/registration/?rPage=login&url=http%3A%2F%2Fwww.metafilter.com%2F92527%2FThe-22-Billion-WhatIf%233120464&eRightsSessionExpired=true&forced=true but the second time it worked. If you need it, here's Google's cache.
posted by churl at 2:38 PM on June 4, 2010


i would never be able to sleep again
posted by nathancaswell at 2:39 PM on June 4, 2010


oh and forget getting stoned
posted by nathancaswell at 2:40 PM on June 4, 2010 [3 favorites]


Man, Woz and Jobs should throw him a million bucks, jeez.
posted by empath at 2:43 PM on June 4, 2010 [12 favorites]


I don't feel bad for the guy because the assumption that his investment would be worth $22 Billion right now is assuming that held his stock the whole time, even through 1987, 1993, 1996, or 2001, years in which it would have been smart to sell it.

Assuming he didn't get in a fatal car accident, assuming Steve Jobs didn't plot against him and run him out of the company during a coke binge, assuming Steve Jobs didn't plot against him and run him out of the company by making it look as if he died in a car accident during a coke binge, etc.

There's a point A where the reasonable move is what Mr Wayne made, and the Point B there's $22 billion and a lot of unreasonable assumptions in between.

I would hope he doesn't kick himself too hard for this. For all he knows, he made the best decision of his life, perhaps the one that saved his life (see above).
posted by Bathtub Bobsled at 2:44 PM on June 4, 2010 [11 favorites]


I saw this article, and it hurt me to read it. It's like Wayne held a piece of coal that would one day become the Hope Diamond.

I suppose it's not helpful to Wayne, but you should always consider the "man bites dog" context of these stories.

I've got a few grand in a biotech stock right now. It crashed into the basement last year, and I'm holding onto it because it has the potential to become a major medical breakthrough- there are serious possibilities that it could rise to 100 times what I paid for it within ten years. They could also go bankrupt due to lack of funding this quarter. This pretty much happens with everything all the time.

It's hard to hold onto things on a whim. I sold Ford when it hit 7 bucks last year. That was, ah, dumb. I sold a bank stock at the same time. That was really really lucky. for every dude who bailed on his college roommates when they were creating this cool little Youtube site, there's a caterer who asked the guys at this company called Google if she could be partially paid in stock options. Everyone else is in the mushy middle. The only stories are about the massive victories and the legendary failures.

And even the failures aren't often than interesting. I had a boss a few years ago who at one point in the early 90's owned five percent of Real Networks. He sold it and bought a house. So it goes.

I do very little investing, but I learned very quickly that you have to immediately abandon the "ugh, if only I bought _____ in ____" mentality because you'll go insane.
posted by XQUZYPHYR at 2:45 PM on June 4, 2010 [16 favorites]


This was the perfect post to see just after finishing The Black Swan.
posted by Sticherbeast at 2:45 PM on June 4, 2010 [1 favorite]


Something doesn't, if you'll pardon the pun, compute here for me, and I'm not sure if I'm just misreading the story.

[Wayne] was 42 and chief draftsman at Atari when he first encountered 21-year-old Steve Jobs...

Wayne, who still lived with his mother...


No offense to my boomerang generation compatriots, because Lord knows I can't judge in regards to relative maturity, but if I'm not misreading this, especially if he did actually have assets to lose, he wasn't exactly big on 'striking out on his own'

(Of course, we don't know the whole story, etc.)

But still...
posted by MCMikeNamara at 2:45 PM on June 4, 2010 [1 favorite]


Also, had he held out, a butterfly would have flapped its wings differently, everything west of the Rockies would be underwater, and Luxembourg would have conquered Europe.
posted by Wolfdog at 2:48 PM on June 4, 2010 [7 favorites]


I was really thinking about buying Apple stock after the first imac was such a hit but I couldn't shake the worry, "What if Steve Jobs gets hit by a truck?". I am such a pussy.
posted by bonobothegreat at 2:53 PM on June 4, 2010


And even the failures aren't often than interesting. I had a boss a few years ago who at one point in the early 90's owned five percent of Real Networks. He sold it and bought a house. So it goes.

My former boss worked at the company that eventually became AOL. She had options and everything. Sold out for a few grand when she left the company. I think she said they'd have been worth something like $50 million dollars if she had held on to them.

One of my good friends got in on 3 IPOs in 2 years, and a couple of others. He was worth $25 million dollars at the age of 22. On paper. He bought houses, cars, apartments, threw massive raves, bought lots of designer clothes and designer drugs, etc. Held on to the stock a little bit too long... When the market crashed, he lost 90% of his money, had a boatload of debt and ended up in rehab and living with his parents again.
posted by empath at 2:56 PM on June 4, 2010 [2 favorites]


(i somehow deleted the part of the second story where i said it was in the dotcom boom.)
posted by empath at 2:58 PM on June 4, 2010


It was you, wasn't it empath.
posted by cashman at 2:58 PM on June 4, 2010 [3 favorites]


Heh, no. I wish. 10% of 22 million is still a lot of money.
posted by empath at 2:59 PM on June 4, 2010


They were wise to change the logo.
posted by Afroblanco at 3:00 PM on June 4, 2010 [1 favorite]


Thing is, had he stayed on we don't know that Apple would be worth what it is. Who knows what would've happened - his mediation may have killed the creative spark or business acumen or something.

Apple seems to be doing alright without him, but not vice versa. Maybe his instincts would've hindered Apple. Who knows.

That's the thing - life is life. Can't say what would've happened.
posted by djgh at 3:02 PM on June 4, 2010 [1 favorite]


one of the most luckless men in the history of Silicon Valley

What a ridiculous statement. How is this bad luck? It's not like he left the shares in his pants pocket and then ran them through the laundry. He just made a business decision that turned out to be a bad one. Calling this "bad luck" is like calling rain on your wedding day "ironic".

Nitpicking aside, this is pretty much the exact opposite of everything good and awesome, isn't it.
posted by elizardbits at 3:06 PM on June 4, 2010 [1 favorite]


Calling this "bad luck" is like calling rain on your wedding day "ironic".

Isn't it ironic? Yes I really do think. Sorry, had to make the obvious Alanis Morrissette joke.
posted by reenum at 3:11 PM on June 4, 2010 [1 favorite]


I had a boss a few years ago who at one point in the early 90's owned five percent of Real Networks.

And he waited and waited and waited and waited and waited but it never got past 5%?
posted by nathancaswell at 3:14 PM on June 4, 2010 [41 favorites]


There are tons of tech companies that go nowhere. And if this guy had stayed perhaps he would have influenced things and caused some bad decisions or something. There's no way to know. and apple stock plunged several times in the past few decades. It's likely he would have sold some of the stock at some point.

However if he'd hung on a couple years he could have made a killing. Another story like this is Bill Joy, who actually stayed with sun but sold all his stock as soon as was possible. Missed out on being a billionaire, I think.
posted by delmoi at 3:15 PM on June 4, 2010


That article makes him out to be more of a tragic figure than he actually is. This video interview give a better feeling for the man.
posted by govtrust at 3:16 PM on June 4, 2010 [1 favorite]


*cues up Laibach's version of "Life Is Life"*
posted by darkstar at 3:19 PM on June 4, 2010 [2 favorites]


I love this part:
Wayne...drew up the contract on a typewriter. There was no such thing as a word processor yet. They were about to invent it.

That's the thing - life is life. Can't say what would've happened
Exactly. Maybe he would have been so worried and stressed out about losing all his assets that he'd have a heart attack.
I had this job a long time ago that was a foot in the door to probably lots of money and a long Careerâ„¢, but it was really stressful and turning me into an asshole. I quit and ended up staying home raising our kids for the last 12 years. Sometimes I regret it but then I look at how awesome my kids are and the fact that I'm not a bloated cocaine addict who's never home.
posted by chococat at 3:22 PM on June 4, 2010 [1 favorite]


I wonder what his patents are.
posted by padraigin at 3:26 PM on June 4, 2010


Yeah, most people in the Valley (at least those over a certain age) have a story like this, although usually not so dramatic. Either the company you didn't join that turned out successful, or stock you held too long and/or sold too soon, etc. I've had some of all that, if I could go back in time and change a couple decisions I'd be much richer, but you never know these things until it's too late.
posted by wildcrdj at 3:28 PM on June 4, 2010 [1 favorite]


Yeah, I could have taken the relatively small inheritance I received when I was eighteen (think low five figures) and put it in Apple stock instead of using it for college, and I'd be a millionaire by now. What else is new?
posted by Halloween Jack at 3:29 PM on June 4, 2010 [3 favorites]


Proof once again that much of life is a stochastic process.

More so than many successful people realize.
posted by warbaby at 3:34 PM on June 4, 2010


bonobothegreat: "I was really thinking about buying Apple stock after the first imac was such a hit but I couldn't shake the worry, "What if Steve Jobs gets hit by a truck?". I am such a pussy."

Back when I was libertarian and believed in all the bullshit of capitalism, I read a lot of Wired (96-98 or thereabouts) and there was a lot of Apple discussion, and I really really believed that Apple had a chance. This was pre-Jobs. And the companies then that I wanted to invest in were Apple, AMD and Nvidia after hearing about the Geforce 256. I think I woulda done alright.

Oh but yeah, I didn't even have a couple hundred dollars to spare at the time, so... it's pretty much irrelevant.

That said, I'd fucking sell the shit outta apple, because I hate those fuckers (well I hate Jobs' closed off approach). And hey I'd profit.
posted by symbioid at 3:38 PM on June 4, 2010 [1 favorite]


There was no such thing as a word processor yet. They were about to invent it.

Oh BS. This false idea that computing (and the whole modern world!) started with Jobs and Gates is tiring. Idol worship is fine if that's your thing, but don't make shit up.
posted by fritley at 3:40 PM on June 4, 2010 [5 favorites]


Well, counterfactuals being what they are, not only would he have had to hold on to his shares, but also not do anything to alter the course that Jobs and Woz ultimately set after his departure. Butterfly effect and all, you have to question whether those shares would have been worth $22B today had he held on to them. It's not like he was just holding them and had no effect on the decisions. Sounds like he was a lot more conservative than the other two and could conceivably dampened their creativity to the extent that they would have failed or at least been much less successful than they are today.
posted by Mental Wimp at 3:43 PM on June 4, 2010 [3 favorites]


When the market crashed, he lost 90% of his money, had a boatload of debt and ended up in rehab and living with his parents again.

He had $2.5M and had to live with his parents?
posted by Mental Wimp at 3:47 PM on June 4, 2010


I'm looking forward to being featured in a similar article, about twenty years from now.

"Yeah, I was one of the original partners with Auntie Entity and Doctor Dealgood, but I freaked out and sold them my share. Who could have predicted that gasoline, ammo and canned food would become so valuable? I could have been running Bartertown, instead of being stuck down here, shovelling pig shit."
posted by Parasite Unseen at 3:49 PM on June 4, 2010 [3 favorites]


This thread also reminds me of a fantasy that I had at one point during the dot-com bubble collapse. At that point, Apple's stock was supposed to be worth $4 billion, total... but the company had $5 billion in the bank. I thought to myself, what if I could somehow manage to buy the company? I could pay for the stock sale and still have a cool billion, right? Well, I'm sure that there are a metric fuckton of reasons why I couldn't have done that, but a man's gotta dream.
posted by Halloween Jack at 3:54 PM on June 4, 2010 [1 favorite]


When the market crashed, he lost 90% of his money, had a boatload of debt and ended up in rehab and living with his parents again.

He had $2.5M and had to live with his parents?


I think he means he lost 90% of his value on paper, and had debts that wiped out the rest of his money.
posted by nathancaswell at 4:08 PM on June 4, 2010


Yeah, basically, he came out of it slightly ahead, but he had a rough patch for a while.
posted by empath at 4:39 PM on June 4, 2010


I have some sloptions in the bottom of my drawer from two jobs ago. When I quit I paid like $480 for them because the price was two cents and I didn't want to be "this guy" if the company ever made it.

They're never going to make it. I think I would take the $480 back right now. For my last job I didn't ever bother exercising them. Frankly they're such assholes I didn't want my passionate hope for their complete failure diluted in any way.
posted by drjimmy11 at 6:11 PM on June 4, 2010 [2 favorites]


That's definitely worse than the Gary Kildall story. At least he was a self made millionaire despite his little miscalculation with IBM. I bet it was allowing Gates and Allen to become billionaires that stuck in his craw.
posted by Bonzai at 6:20 PM on June 4, 2010


XQUZYPHYR: "I do very little investing, but I learned very quickly that you have to immediately abandon the "ugh, if only I bought _____ in ____" mentality because you'll go insane."

I read an article once about printing currency notes for the Treasury. After a print run, you'll have someone pushing around a pallet cart with something like $43 million of C-notes stacked on it. They said something like, "You have to think of it as just an industrial product. Otherwise you'd go nuts."
posted by Joe Beese at 6:29 PM on June 4, 2010 [6 favorites]


I do very little investing, but I learned very quickly that you have to immediately abandon the "ugh, if only I bought _____ in ____" mentality because you'll go insane.

Yeah, if you sell stock and make some money and are satisfied with that, it doesn't matter what happens later. "You can't go broke taking profits," is a good rule to follow, but you can lose a lot of money by failing to take money off the table when it's available and holding on for more. "Don't be greedy" is also a good rule.
posted by krinklyfig at 8:16 PM on June 4, 2010 [1 favorite]


He had $2.5M and had to live with his parents?

I knew someone who had a big paper gain on some startup stock and did not buy it in an 83(b) election. They owed taxes on it the year they exercised their options, and then the stock crashed. The tax they owed didn't go away. In this case, a loss on paper only resulted in bankruptcy, because they had no other assets to pay the tax with.
posted by zippy at 10:53 PM on June 4, 2010 [1 favorite]


I saw Wozniak give a speech where he credits Mike Markkula with being the 'third wheel' in the creation of Apple (probably after Wayne had left). He was a former genius marketer who retired young from Intel, and Steve Jobs brought him out of retirement to sell Apple as a company.

I can't remember the exact quote, but as Markkula was preparing them for an electronics show he told them that the company would be worth $3 million in 3 years (guessing at these numbers), and that the two Steves just looked at him like he was from Mars. He turned out to be off by 10 times.
posted by eye of newt at 11:12 PM on June 4, 2010


I'd give up $22 million to get away from Steve Jobs.
posted by Twang at 12:01 AM on June 5, 2010


I read an article once about printing currency notes for the Treasury. After a print run, you'll have someone pushing around a pallet cart with something like $43 million of C-notes stacked on it. They said something like, "You have to think of it as just an industrial product. Otherwise you'd go nuts."

I had the same issue a million years ago when I worked retail and was counting the cash and doing the deposits. I told the owner "I'm freaking out about all this money!" and he gave me the same advice- "it's not money, it's inventory- there's more money in the freezer" or something like that. Very freeing. Was still weird to be sitting in a tiny office surrounded by piles of cash...
posted by gjc at 5:27 AM on June 5, 2010 [1 favorite]


the "ugh, if only I bought _____ in ____" mentality

My favorite missed investment story comes from PA back in the 1960s, where a friend of mine's father was asked to come in with some people on a Broadway musical, and he turned them down, saying, "Who's going to go see a play where there's a fiddler on a roof?"
posted by LeLiLo at 12:48 PM on June 5, 2010


the "ugh, if only I bought _____ in ____" mentality

Two stories of this ilk come to mind when I think about this... The first is my old high school buddy's father, who had the chance to get in on the original Trivial Pursuit and didn't... And the other is my wife's uncle, who went to university and hung out with the guys who created D&D. Although he ended up a VP at the World Bank, so I don't think he's hurting too much. :)
posted by antifuse at 7:31 AM on June 7, 2010


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