Business & Technology / The patince of Jobs Apple's cofounder is back on the cutting edge with Pixar; Los Angeles 12/11/1995 U.S. News & World Report Page 83 (Copyright 1995)
Like almost everyone, high-tech visionary Steven Jobs sees something of himself in the characters in the new hit movie Toy Story. Like almost no one, Jobs most closely identifies with Sid, the young boy who relentlessly redesigns his toys into bizarre mutants with Erector Set legs, missing eyes and lizard heads. Of course, Sid didn't spin his unusual worldview into more than $1 billion last week. Jobs did, when Pixar Animation Studios, the company that helped bring Toy Story to life, completed a stunningly successful initial public offering.
Exponentially oversubscribed from the start, Pixar's shares went out at $22 but instantly shot up to $45.50 in their first hour of trading, finally closing at $39. Pixar finished the week at $40.25 per share. The stock offering made Jobs, who bought the computer animation company almost 10 years ago for $10 million and then pumped another $50 million into it, an instant billionaire. More important, his once mythical image was restored. "This is the rebirth of Steve Jobs," says Steven Samblis of Empire Financial Group. "At the very least, it's going to make him noticeable for his true talents."
Genius. As Jobs's legend goes, those talents first emerged nearly 20 years ago, when at age 21 he cofounded Apple Computer and earned a reputation as a sometimes mercurial genius who was better suited to tinkering in the garages of Silicon Valley than to managing a huge corporation. He left Apple after a power struggle in 1985. With more than $100 million in his pocket, Jobs started NeXT Inc., a company that made an all-black computer that was incompatible with virtually everything. NeXT evolved into a profitable - if unglamorous - boutique software maker. Jobs became a poster boy for flameout.
Pixar has changed all that. Still, analysts are divided over the long-term prospects of the company, which makes computer-animated movies and represents the first real marriage of Hollywood and Silicon Valley. Some believe Pixar shares are floating on the steam released by Toy Story and its big box office receipts. "As an investor, you have to divorce the business from the stock," explains Roger McNamee of Integral Capital Partners, a technology investment firm, "and Pixar the business looks wonderful, but Pixar the stock looks very fully priced."
Other analysts point out that Pixar's three-picture deal with Disney is skewed heavily in Disney's favor. For example, Disney gets at least 80 percent of revenues generated by Toy Story. Pixar, based in Richmond,
Calif., also is not alone in the marketplace. DreamWorks SKG, Warner Bros., Turner Broadcasting System and Disney are all developing computer-animated feature films. And Pixar has competitors in graphics
software.
Yet no one else has Jobs, who simply by making a comeback of this magnitude is guaranteed a spot in the record books. Given his boldness, his flair for thedramatic and his newfound wealth, he should fit in
beautifully in Hollywood.
FOLLOW THE MONEY Roots. Jobs leaves Apple Computer in 1985 with more than $100 million.
Investment. He sinks $60 million into Pixar. Payoff. Pixar's initial public offering gives him $1 billion plus.
Picture: In the limelight. Steven Jobs has become much wealthier because of Pixar's shares. (Louis Psihoyos - Matrix) |
