The Dumb Mistake That Ended Up Costing Steve Jobs $29 Billion

The Dumb Mistake That Ended Up Costing Steve Jobs $29 Billion

Steve Jobs is already richer than most of us can ever dream. He’s worth more than 8 billion dollars according to the most recent estimates.

But he could be richer. A lot richer. In fact, a single mistake once cost Steve more than twenty nine billion dollars.

Back in the early days of Apple, Steve Jobs invested $1,500 to get started. All well and good, but when Apple went public back in late 1980, that $1,500 translated to 7.5 million shares.

If you multiply those 7.5 million shares by Apple’s $400 share price today, Steve Jobs would have $31.6 billion worth of Apple stock.

That’s a pretty penny, but here’s the thing: when Steve Jobs was fired as CEO back in 1985, Jobs petulantly sold one million, four hundred and ninety-nine thousand and ninety-nine shares of his stock. He only kept one share so he could continue to get his annual report.

When Jobs came back in 1997, he was award additional shares, and that stock is worth about $2.2 billion today.

Of course, Jobs could never have known he would have been asked back… and without Jobs at the helm, Apple quickly sank into mediocrity.

Even so… d’oh!

  • stereohero

    Not quite. Since he USED the money from selling those shares to fund NeXT and Pixar – which indirectly led him back to Apple and its further success.

  • SapirKraus

    Steve doesn’t care about the money,
    And here at Cult Of Mac you should know that.
    He’s a Buddhist,and 8 billion dollars is well enough.
    He has no need of more money.

  • Alberto Hernandez

    He is pretty generous and might have donated most of the extra money.

  • Phil

    I believe I heard the man say something like: “My goal is not to be the richest man in the graveyard.” (or somewhere in the lines of that…)

  • imajoebob

    Miserable on the Maths, Johnnie.  How much did he sell those shares for? Did he use it to start NeXT?  Did he use it to start Pixar?  How much did he get for Pixar? For NeXT? How much is his Disney Stock now worth? If he hadn’t had the money to start NeXT where would Apple be today?  

    If my grandmother had wheels she’d be a wheelbarrow.

  • Johnny Appleseed

    You didn’t allow for Apple’s three stock splits, which means he would have eight times as many shares today.

  • Andrew

    Seriously, this has to be one of the link-baitiest headlines I’ve seen here in a while. As the other commenters pointed out, if Jobs hadn’t sold the stock and created NeXT, Apple wouldn’t be worth what it is today by a long shot.

  • AnipzRaymond

    He’s not Gate…d’oh !

  • Jaime Cruz

    just leave the money talk to people who atually know what theyre talking about, yo do pretty well just talking about apple products

  • Tash Wahid

    Actually he would be even richer if he shorted apple stock when we was fired then normalized them when he got back.

  • adammiarka

    His decision to only keep one stock was symbolic in that he was saying he did not believe in Apple’s new management.   He could care less a bout the money.

  • Mjperini

    It IS very silly, but it is symtomatic of a larger problem:
    Some authors don’t bother to check facts, and some authors intentionally snatch “facts” from thin air.in this case, the numbers don’t add up, AND the logic is faulty.Author claims he GOT 7.5 million shares, and SOLD 1,499,999 shares6 million shares would be missing.7,500,000 x $400 = 3 billion   Not 31 + billion ( a factor of 10)What the author MAY have been trying to say is that his original number of shares if continuously held through stock splits and or stock dividends (i don’t know the history) would have been worth the amount quoted, but as written it is just wrong.And as has already been pointed out, the proceeds of his sale were used to make investments where he learned and developed the skills and expertise to revolutionize Apple on his return.In his own words “getting fired was the best thing that ever happened to him)Without those lessons there probably would be no Apple.In light of that, There is NO instance where the Headline could possibly be true.

  • Parry King

    Money can’t buy health. Bloke is still gonna die soon anyway. I’m sure he’d give up all his riches if he could to be in perfect health. Goes to show,
    Money can’t buy everything.

  • guest

    shitty shop is shitty

  • Cold_dead_fingers

    Wow, what a terrible thing to say. I think you should take that down.

  • Johngurn

    I’m pretty sure that 7.5 million shares at $400 only equals 3 billion dollars, not 30. Of course, the stock splits make that up to about 24 billion, so the calculating error and the mistake of forgetting the stock splits just about cancelled out.

  • Trrosen

    7.5 million shares times three splits equals 60 million shares today.
    60,000,000 times $400 equals 24billion dollars.

    Were the f is Brownlee getting these numbers.

  • Chase Hausman

    “That Parry King bloke still gonna die anyway.”

  • Bobb

    Math. You suck at it…

    History and causality: You suck at it even more
    Link-Bait: Taken. So at least you have that. Be thankful that you apparently have no real editing going on before you post.

  • Ryan Warner

    Agreed. Definitely not a mistake. In fact, it’s the opposite. Because of this money he invested into Pixar and NeXT, there would have been no NeXTStep which would have meant no viable OS for Apple to purchase as successor to OS 8/9, meaning OS X wouldn’t exist as it stands today, nor iOS, iMacs, or even Apple itself (and to a lesser extent, neither would computer animation). It also wouldn’t have been such an easy in for Jobs again and he may or may not have ever gotten back with Apple because of it since they only got him back because they purchased NeXT.

    If anything, you could say, “How Jobs turned $4.5 million into $8 billion.” It was an investment.

  • Boredumb

    the part of the math that caught my eye is, that if he had 7.5 million shares, and “petulantly sold one million, four hundred and ninety-nine thousand and ninety-nine shares of his stock”, doesn’t he still have 6 million and one shares???

  • Contrarios

    He used the money to purchase Pixar and start Next.

  • Ze Mota

    Would that buy him a new pancreas?

  • gerenm63

    They get the Apple talk right about as often as the money talk…

  • Hal Summers

    I don’t know that he really cares that much about money.  If he did, he could have made a whole lot more since he came back than $1 a year.

  • No_Tie

    Of course, the millions from that sale allowed him to start NeXT, which was the reason they brought him back.

    I remember when he came to our school (Carnegie Mellon) during that time, where he got the Mach kernel from.  He gave a cool presentation where he played Revolution #9 backwards using this new thing called a CD-ROM.

  • Ryan Simmons

    He likes $1. 

  • Richard Mears

    “Of course, Jobs could never have known he would have been asked back… and without Jobs at the helm, Apple quickly sank into mediocrity.” 
    Exactly. So, without the 20/20 vision of hindsight, how can you possibly call it “dumb?”  

    Would any reasonable man with the same information not have made the same choice?

  • SilverPanda

    Wow, that was a really awful article. Like all the others said, while reading it three things stood out:
    1. What a bloody mischievous link-baity headline
    2. Math, do you know it?
    3. Dude, there’s a reason he had enough to buy Pixar and start a new computer software company (NeXT) after being thrown out of Apple. He had sh*tloads of money from the stocks, and without it he would never have developed something that ended up saving Apple itself. 

    Change that headline. It’s more like “The Awesome Decision That Ended Up Inducing The Conception of Cult of Mac And Therefore My Job”.

  • payam

    One has to consider that he had to raise capital to work on his Pixar project and NeXT. Everybody else would do the same thing as he did. Perhaps, he was thinking that Apple will go down the drain (which in fact it went ) and the stock would worth nothing if he would keep them.

  • ArrowSmith

    So “Cult of Mac” is a Buddhist web site?

  • SapirKraus

    No,
    But it’s a website about Apple,
    And anyone who knows a thing or two about Steve, knows he’s a Buddhist.
    So this article is kind of pointless, Because, Buddhists don’t really care about having an extra
    29B $ in their bank accounts…

  • vikrantt

    it is interesting how one can mis-connect the dots in the hindsight… Now think this: If Jobs had not sold his shares, he wouldn’t have any capital to start with Pixar/Next…and hence would have never came back to Apple,..and hence would be worth $0 today.

  • dale2000

    Plus, while doing some research would help ease these concerns, there are also rules about buying stock in a company.  For instance, if and when you buy more than 20% of a company’s shares at once, it’s considered a technical takeover bid, and you have to announce it, disclose what your intentions are, etc etc.

    Even still, if Jobs negotiated to have shares assigned to him when he returned, and then he went and bought more, it might raise suspicion in the board of directors.

    Point being, there are MANY reasons that a corporate insider would hesitate from buying stock from his own company.

    In short, I would say we’ve been Brownlee’d once again.  I swear that verb is going to catch on around here…

  • Steven Zahl

    8 Billion or 30 Billion.  Same Lifestyle.  Same Bad Pancreas.

    Will not make a Diff.

  • Steve

    Any chance you could correct the ‘number-errors’ here?  Was it 7.5M shares, and he sold 1,499,099 shares, or was it 7.499999M shares he sold — or maybe the $1,500 translated to 1.5M shares to start?  It’s hard to beleive (read: I’d rather not believe) these are cut-and-paste errors…

    Your closing number also assume he would never have bought/sold any shares along the way — but I know that’s not your point; many people who aren’t even VPs never mind CEOs correctly divest a little, though I gather a man who’d sell all but one share is likely to not divest at all while at the helm, which probably says more about Steve.

    There are a lot of interested stories like this — e.g. some ealry internet company CEO sold some stock to buy his girlfriend (perhaps wife) and engagement ring (perhaps anniversary present) — for a few thousand which today would be worth millions.  There might actually be an interesting book here — but you have to put in the dedication “to those who never had the opportunity to make the right decision.”

  • blog correction nazis

    Hard to follow this story here. You print out numbers one through nine. And you write out numbers greater than 10. It’s journalism 101. 

  • Aaron

    I purchased one share of Apple stock (to get the certificate) in 2003 for $16. I sold the TWO shares (the stock split once since 2003) for just shy of $400 each last month. That bought me a new set of tires and an alignment on my car (see my avatar), with a little more for a nice dinner. If I rely on hindsight, I should have sold my house in 2003, purchased Apple stock with the proceeds, lived on the street for 8 years, then been a multi-millionaire right now.

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  • twitter-17237140

    Seriously, is that a mistake?! He didn’t accidentally sell his stocks. Whoops! HIT THE WRONG BUTTON! D’OH.

    And you don’t put and when writing out numbers.
    Mistake: One million, four hundred and ninety-nine thousand and ninety-nine shares of his stock….
    Should be: One million, four hundred ninety-nine thousand ninety-nine shares of his stock. 

  • CharliK

    You act as though you know that Steve would care about those ‘lost’ billions. Maybe he doesn’t. 

    Also, how much has he made from his shares in Pixar. You know, the ones he got due to the capital he put into the company with the proceeds from his Apple sell out. 

    I have a crazy idea. Let’s email Steve and ask him if he feels it was a dumb mistake to sell. Since saying it is ‘dumb’ is really a matter of opinion and in the end only his matters. I bet his apple.com email still works. Be sure to let him know your opinion in the matter. 

  • CharliK

    It is hard for us to say that there wouldn’t be Mac OS X if he hadn’t sold the shares, left the company etc. There might have been although the path could have been a little different. It might have been a bit later or even earlier perhaps 

  • AlecTheFirst

    That photo of him looks so real!

  • AlecTheFirst

    That photo of him looks so real!

  • mikefilsaime

    You know. I was thinking when I wrote this offline that I wanted to comment when I got back online. 5 days ago, we all knew how sick Steve was. Do you think he cared about his billions or this mistake or would he trade it in for his health and just to own Apple and $1. Look last year this article would have been O.K. – But we knew he stepped down for a reason. Not because he was “richer than any of us could dream” but because he was sicker than any of us. There were better things to write about Steve Jobs than this. I wish I posted this last week but after hearing the news of his death today it sparked my memory to find this article and say now what I wanted to say then. – RIP Steve. Make heave a better place.

  • newton wan

    There’s another mistake…jobs traded in heaps of underwater “out of the money” stock options in 2003 or something like that for “in the money” stock options from one of those end of decade articles.  It went something like the worst stock trade of the 2000s. Someone tracked down Job’s figures for Apple stock options and by doing that he lost roughly $10 Billion.  Making him the worst trader of the past decade.  

    Everyone’s human…even Jobs…he makes mistakes, eats, sleeps and is subject to outside influence like all of us…he never thought the iPod would turn his company into a monster…if he was that confident…he wouldn’t have made that trade…

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.

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