From the course: Finance Foundations: Business Valuation

Unlock the full course today

Join today to access over 22,600 courses taught by industry experts or purchase this course individually.

Microsoft IPO and the valuation process

Microsoft IPO and the valuation process

From the course: Finance Foundations: Business Valuation

Start my 1-month free trial

Microsoft IPO and the valuation process

“

- All right. Who's the smartest person in the world? - You're looking at him. - Ah, ah, very funny. Next guess? - Well, I don't know if he's the smartest, but I've always thought that Bill Gates is pretty smart. - Agreed. So let's talk about the valuation process that Bill Gates used when his company Microsoft went public back in 1986. - [Man] Microsoft started business in 1975. The company was originally structured as a partnership between the two founders. Bill Gates was 64%, and Paul Allen with 36%. The company was then structured as a corporation in 1981. - [Second Man] As of early 1986, five of Microsoft's competitors had recently gone public. These companies had price earnings multiples ranging from a low of 10 to a high of 21 with an average of 15. - Bill Gates, who held the titles of Chief Executive Officer and Chairman of the Board had been approached by several investment banking firms, urging him to take his…

Contents