On April 10, 1987, the West German Publishing House finally went public after several months of preparations and roadshows.
Before the event, Henry and Edward Joe speculated about how much the stock price would rise. Edward believed that the average market value for a medium-sized publishing house would reach between $80 million and $90 million, but he was certain that West German Publishing House would exceed $100 million.
Henry smiled, unsure of the final market value for the West German Publishing House. He accompanied Edward Joe to Wall Street, keeping a close eye on the daily fluctuations in stock price.
Although West German Publishing House was only a medium-sized publishing house in the United States, its strong performance and Henry's investment attracted attention from investors. The stock price rose impressively, with the closing price of the day reaching $25 per share. This price shocked Edward Joe, while it pleasantly surprised Henry—it seemed that Henry's fame did indeed play a significant role.
This IPO (initial public offering) for West German Publishing House issued a total of 2 million shares, amounting to nearly 20% of the company. As a result, the market value of West German Publishing House ascended to $250 million, surpassing Edward Joe's expectations by more than $150 million. The following day, the stock price fluctuated slightly, but overall remained stable.
The entire West German Publishing House was buzzing with excitement!
In the original IPO plan, Henry's shares were to be diluted. After cashing out a portion, Henry retained only 23.5% of the company. However, this move left him with an extra $12 million in his pocket. Though he played the financial market intelligently, he refrained from trading stocks casually, aware that stock values were volatile. With Henry's influence, such fluctuations were unpredictable. For instance, the Internet bubble in 2000 was anticipated far in advance.
Nonetheless, there were factors beyond Henry's control—certain historical events like the disintegration of the Soviet Union would occur regardless of his actions. If Henry had the power to prevent this, he would start to wonder about his own influence!
With $12 million in cash from his recent gains, Henry felt secure financially for the time being.
As of April this year, the number of Internet users in the United States had reached 100,000. One Internet company, in particular, performed exceptionally well and even caught Henry's attention.
That company was called "AOL," a name already famous within the industry. In the early days of the Internet, it coexisted alongside Yahoo, later merging with Warner Pictures, and reached a market value of over $300 billion. Henry did not underestimate this company and immediately instructed his staff to collect information about it.
The next day, Henry received a report on AOL.
AOL's predecessor was initially known as Quantum Computer Corporation, founded by Steve Case in 1985. They had begun offering online information services for computer users, not falling behind Nicholas Bookstore, although their development pace was not as rapid.
Steve Case believed the Internet had vast potential, and he recognized the need to develop online information services despite the prevailing adverse conditions in the network environment. Many at the time perceived such ambitions as foolish, but unlike Henry, who had the financial backing to pursue riskier ventures, Steve Case's resources were limited.
His courage to forge ahead was truly admirable.
In 1986, they created a service system and persistently approached Apple, eventually succeeding in convincing Apple to integrate their online service. Thanks to Steve Case's determination, the company managed to survive; as the Internet evolved, it grew increasingly notable, eventually making its way to Henry's attention.
Henry frowned slightly while reviewing this information.
Although AOL was a force to be reckoned with, the fact that Sequoia Capital had already initiated contact with them caused Henry the most concern. This development was a significant headache!
Henry was well aware of AOL's remarkable history in his past life, particularly their acquisitions of Netscape, ICQ, and Warner Pictures. If a powerhouse like Sequoia Capital was invested in AOL, he would have to take measures to counteract it.
Henry contemplated reaching out to Steve Case, envisioning a potential acquisition. He appointed Nicholas Bookstore's CEO, Gilli Hutt, to personally conduct the discussion. Gilli Hutt's reputation and status on the Internet were substantial, and his involvement would lend credibility to the overture directed at Steve Case.
Henry preferred to secure a full acquisition; if that was not feasible, obtaining a controlling interest would suffice.
However, the day after Gilli Hutt's visit, he contacted Henry to inform him that Steve Case was resolute in his decision and had declined the acquisition offer.
Henry was not surprised by this news. Steve Case was ambitious and capable; otherwise, AOL would not have flourished under his leadership.
Not long after, Ford Brook, the executive director of Sequoia Capital, called. Henry could detect a note of pride in his tone.
"Henry, how are you? I heard you approached Steve Case about purchasing his company?"
"Hehe, Mr. Brook, you seem well informed," Henry retorted.
"Oh, it's nothing. Sequoia Capital is exceptionally interested in this company, and we've been negotiating with Steve. He also mentioned your plans to acquire AOL!"
"Oh, really? It appears that this guy is pretty clever, using that to entice a sale," Henry replied.
"Haha, well, we at Sequoia Capital were initially cautious about AOL's future, but knowing that someone as esteemed as Henry is interested certainly gave us confidence! The board has decided to invest $15 million in this endeavor, and Steve has agreed to our financing plan! We've just signed the contract!"
"Congratulations on discovering another gold mine," Henry remarked coldly; Ford's words were clearly a show of superiority.
"Haha...thank you, thank you."
"I'm curious, how many shares did you acquire?"
"Uh..." Ford faltered slightly. "25%. This guy Steve is quite difficult, you know, hehe..."
"Only 25%? It seems that had I not sent someone over to talk to him, you wouldn't have invested so much. I'm truly sorry for being a hindrance!"
Ford's expression stiffened, and he chuckled awkwardly, "Uh, nothing, nothing."
Henry hung up the phone, a frown on his face. After a moment of contemplation, he called Gilli Hutt and instructed him to keep a constant eye on AOL's development. Subsequently, Henry began brainstorming his next steps. With only $22 million in capital, he was mindful that money would be spent quickly in the burgeoning Internet scene, prompting him to devise ways to generate funds.
Henry had four subsidiary companies under his control: Nicholas Bookstore, Cisco, Pixar, and Noah's Ark. Among these, Cisco was the only one generating profits, but they had reinvested all earnings into development, leaving no dividends. The other three companies were wasting resources.
After deep consideration, Henry determined that the best course of action would be to prepare for the launch of the Netscape browser, ultimately hoping to raise more capital. The significance of a browser was undeniable; while it might not be as essential as other developments, Henry figured that if he could rake in billions through Netscape, he wouldn't have to stress about funding ever again. He envisioned creating a range of Internet companies set to thrive in the future. If he ever ran into financial trouble, he could always split a company and take it public to attract more investment!
IPO financing was the key!
After much reflection, Henry came to this conclusion.
Then he returned to Nicholas Bookstore and spent an entire afternoon discussing plans with Gilli Hutt.
The following day, Nicholas Bookstore made a major announcement.
"The board of directors has decided to split the Netscape browser for an upcoming public offering, and an equity incentive plan will also be enacted. The company's employees will have the opportunity to subscribe for shares in accordance with the corresponding contribution standards set by the company!"
Gilli Hutt shared the news, and the entire company erupted in cheers.
On June 1, Nicholas Bookstore officially split the Netscape browser, establishing a separate subsidiary and holding a press conference.
During the conference, Gilli Hutt announced the plan for the Netscape browser to be listed on Nasdaq.
When the news broke, the media buzzed with excitement. This would mark the first Internet company to go public since the sector's rise!
Various media outlets, including newspapers, television, and radio, covered the story extensively.
Upon hearing the news, Sequoia Capital quickly reached out to Henry.
"Henry, I heard that Netscape browser is about to launch its listing plan?" Ford Brook inquired.
"Yes, we have submitted our listing application to Nasdaq," Henry confirmed.
"As you know, Sequoia Capital holds a very optimistic view of your Netscape browser. Can we subscribe to some shares before it goes public?" Ford asked.
"Subscribing for shares is not impossible, but let's exchange for some Apple shares," Henry countered. If Sequoia Capital hadn't invested in AOL, he might have considered it, but he didn't want them taking advantage of the situation.
Ford paused and replied, "I'll need to discuss this with the board of directors."
Sequoia Capital still believed that holding Apple shares held more value than shares in the Netscape browser. Henry did not elaborate further, confident that they would regret their decision once Netscape went public.
A short while later, Gilli Hutt became busy with responsibilities; he held multiple positions as CEO of both Nicholas Bookstore and Netscape Browser. While he dedicated himself to managing roadshows, much of the heavy lifting fell on Henry's shoulders. With his 2% ownership stake in Netscape, Henry was exhilarated not to mention the potential for a million-dollar windfall after the listing.
By September, Netscape was officially listed on the stock market.
This event sent shockwaves across the United States.
The Netscape browser's IPO involved issuing 2.5 million shares, accounting for 20% of the total share capital. Upon rolling onto the market, the stock skyrocketed, rising as if propelled by a rocket. Incredibly, its pace of increase rivaled that of Microsoft. The issue price stood at $2 per share, but by the end of the morning, it had soared to $18—a ninefold increase. By afternoon's close, the stock price continued to climb, reaching $40 and creating a miracle on Nasdaq.
That night, national media went into a frenzy, with global outlets following suit, all eager to report on the legend of the Netscape browser launch!
With this public offering, Netscape concluded with a staggering market value of $500 million!
The New York Times declared, "Netscape has achieved remarkable success with its IPO, and Internet companies are set to flourish!!"
The Washington Post reported, "A company that began as a spinoff with less than 10 employees has a market value of $500 million. It's extraordinary; investors are going wild!!!"
Regardless of the media's praise or skepticism, Netscape's stock price continued to rise the following day, albeit at a less dramatic rate than its IPO; it increased by just $2.
The successful listing of Netscape ignited interest in Internet companies, prompting many investors to start investing money in the sector. Sequoia Capital was no different, actively seeking out new opportunities in addition to their AOL investment.
Through this IPO, Nicholas Bookstore raised over $70 million.
Next, it was time to execute more ambitious plans.