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Today marks the 31st anniversary of Microsoft’s (MSFT) IPO back on 3/13/1986. You don’t need us to tell you what a great run it has been for MSFT shareholders, but just to remind you, if you invested $10,000 into MSFT at the IPO, that investment would be worth $6,646,604.94 today, and that doesn’t even include dividends! Not a bad investment even for a 31-year time frame. What’s even more interesting about MSFT over the last 31 years, though, is how the company has been able to reinvent itself from a PC-centric company to more of a cloud-based company. It’s hard enough for a small company to reinvent itself, but for a company that was once the largest in the world to lose a lot of its relevance and then shift focus and move back into a leadership role is nearly unheard of. Apple (AAPL) is a name that quickly comes to mind, but other examples of such a reinvention are few and far between.
The chart below does a good job of showing the rise, fall, and rise again of Microsoft over the last 30 years. As shown, it’s been anything but a straight line. As far back as December 1999, the stock was less than $5 from its current level before its share price dropped 75%. Whereas a $10K investment in MSFT at the IPO is worth $6.7 million today, a $10k investment back in December 1999 would only leave you with $10,900 excluding dividends.
Since the MSFT IPO 31 years ago, no other current member of the S&P 500 has had a better run than Mr. Softee. The table below lists the fifteen current members of the S&P 500 that were around at the time of the MSFT IPO who have seen their share price increase by more than 10,000%. We also show the two stocks — American International Group (AIG) and Xerox (XRX) — that have actually seen their share price decline during the same time period. Remember, this is a list of current S&P 500 stocks that were public back in 1987. Obviously there are a lot of companies that were around in 1986 that have declined, gone out of business, and/or are no longer public.
As far as the two losers cited, if a company has seen its share price decline over a 31-year stretch, there isn’t much you can say. As far as the winners are concerned, there are a lot of household names. A name like Amgen (AMGN) has rallied 57,577% since March 1986, while Home Depot (HD) has gained over 40,000%. Surprisingly, Apple ranks just sixth on the list with a gain of 31,373%. Finally, while these days it seems like just about every retailer besides Amazon.com (AMZN) has fallen on hard times, there are actually two retailers — Best Buy (BBY) and Ross Stores (ROST) — that made the list. The way things have been going for the sector, though, we wonder if they will be able to hold on to these gains a year from now.
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