Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [144]
The strength of Apple’s bargaining position was reflected in the number of investment bankers who came knocking on the door trying to sell the virtues of their firms. Apple’s stock offering promised to be one of the largest in years and the prospect of the commissions was enough to make even the most staid investment banker drool. The visitors left thickly padded brochures boosting the merits of having their firms estimate the value of Apple, and there was plenty of talk about “ongoing relationships,” “aftermarket support,” and “retail networks.”
Among the callers were officers from the San Francisco investment and underwriting firm Hambrecht and Quist, which for about a decade had specialized in investing in young companies and underwriting technology issues. The men from Hambrecht and Quist had to make about ten visits and give presentations to Apple’s top managers and its financial and legal staffs before finally winning the business. To balance Hambrecht and Quist’s reputation among the freer spirits of the investment community, Apple arranged for the issue to be co-sponsored by the more stolid New York banking house of Morgan Stanley. When Morgan Stanley decided to seek the Apple business and, more important, when it accepted equal billing with an upstart investment firm, it gave tacit notice that longstanding allegiances had given way to new. Almost immediately Morgan Stanley dropped its connections with IBM and started to be more aggressive in its quest for business from young companies.
An odd sort of relationship developed between West and East and between Apple’s managers and the financiers. Jobs complained that the bankers weren’t giving Apple enough attention, and Michael Scott, in particular, took every opportunity to goad the men with their monogrammed shirts and tiepins. When Apple’s managers were invited to attend a briefing made to some investors by Genentech, a South San Francisco biotechnology firm that was also preparing to go public, Scott turned up wearing jeans and a cowboy hat and was sent out to buy a tie. At another meeting with the bankers he dressed himself and a couple of others in baseball caps, black armbands, and T-shirts stenciled with the slogan THE APPLE GANG. For their part some of the bankers found it hard to believe that Scott was the president of the company they had so eagerly embraced.
Few stock watchers needed to be reminded that Apple was going public. In the last half of 1980 the new issues market seemed almost like a throwback to the late sixties when the hot intersection had been in Beverly Hills at the corner of Wilshire and Santa Monica boulevards. As fall turned to winter Arthur Rock’s hunch came to look better and better. When Genentech went public in October 1980, it was the cause of pandemonium. After opening at $35 the stock burst to $89 before retiring for the night at $71. With that display the interest in new issues spread like swine flu. Though the SEC forbade companies to give earnings forecasts or promote the stock in the weeks before the public issue, magazines and newspaper reporters did their own work. The publicity that Apple received in the weeks leading up to the stock issue was the first widespread national publicity that the company had received. It was partly generated by the prospect of the size of the issue but it was also the belated payoff for the way Apple had wooed, flirted, and dallied with the press during the previous years.
Apple was touted by investment analysts and portfolio counselors, by mountebanks who made their living dispensing tips, by the authors of stock guides and newsletters, digests and advisory columns. “Every speculator in hot new issues,” The Wall Street Journal reported, “wants a bite of Apple—Apple Computer Inc.—but most will be lucky even to get a bit.” Potential investors came out of the woodwork. The sacks of letters that