3 ms·
>...The story of Microsoft floating a significant loan to Apple in order to keep Apple solvent in the late '90's is well-known. That might be well known, but i
by opo 8y ago
>...The story of Microsoft floating a significant loan to Apple in order to keep Apple solvent in the late '90's is well-known.
That might be well known, but it never happened. To resolve a patent violation and alleged stolen source code, Microsoft bought 150 million dollars of Apple stock. (There were other aspects of the agreement, but there was no loan.)
Your general point was likely right - Microsoft could have dragged out the trial for years and they likely didn't want to be seen as the only maker of OS software for personal computers.
- mikekchar 8y agoDisclaimer: The following is based on my memories of working at Corel at the time. My memory is crap, so it is possible I've made mistakes. Please verify the authenticity of my claims if it is important to you and don't take my word for it. At almost the exact same time, MS bought Corel Stock that enabled Corel to stay afloat. It was non-voting stock, but it had a veto on acquisitions (to reasonably protect their investment). They assured people that their didn't intend to use the veto and even worked with Corel to help them find companies to acquire with their new capital (one of them being a certain very cool artistic paint program, whose name I forgot). Some time late, MS sold their Corel stock to Vector (VC company partly owned by Paul Allen) at a huge loss. Vector then told the Corel board of directors that they would exercise their veto on acquisitions unless the board authorised a buyout by Vector. The penalties on the acquisition deals would have put Corel under, so they had to agree. Vector bought out Corel at an attractive price. Derek Burney (then CEO of Corel), was replaced, but actually gave up his parachute clause in order to take a role as senior program manager as Microsoft. Most of the other senior VPs also managed to land roles at Microsoft. Vector admittedly ran Corel well and made quite a large profit by having a new public offering and selling 25% of the company. They were sued by previous share holders of Corel, but I didn't hear how that lawsuit ended up (I think the previous share holders lost). I actually talked to Derek Burney about this stuff before he was ousted and he told me that he didn't have any choice in the way it went down. He said they were basically completely out of money before MS stepped in and that without MS's help, they were months away from completely shutting down. He didn't comment about the rest of how it worked out. My assumption at the time was that the "investment" in Apple was intended to be a similar kind of operation, but that Steve Jobs was too canny to fall for it. I'd love to see all of the conditions attached to that money to see if I'm right.
- ghostly_s 8y agoI don't follow the scheme here. What are "penalties on the acquisition deals"? This all seems rather roundabout when it's dependent on the company being close to insolvency anyway, so they could have just bought them outright to begin with if that was really their master plan.
- mikekchar 8y agoIn order to buy a publicly traded company outright, you need to get permission from the board. This is just the machinations to get that to happen -- at a price that they wanted.
- taw123 8y agoI'm guessing Corel was in the middle of an acquisition that had a back out penalty. If the acquisition was vetoed, the back out penalty would have bankrupted Corel. Sounds like blackmail to me.