Microsoft Corporation (NASDAQ: MSFT) has seen it all before, having weathered the dot-com bust of 2000 and the Great Recession along its rocky road to $1 trillion in valuation.
Here's a look at how it went from IPO to its first valuation milestone, $100 billion, and eventually to $1 trillion.
In Immediate Demand
Microsoft was already very well-known by the time it went public, as were its founders, Bill Gates and Paul Allen. The company had developed the MS-DOS operating system and then in 1985 debuted its graphical Windows platform. A year later, as it prepared for an IPO, most young people knew its products, which were closing in on being the best-selling software in the world.
Microsoft stock was in demand right from the start. While its opening share price on the day it went public in 1986 was $21 per share, the first trade was actually at $25.50, according to news reports from the time, so it was jumping immediately. More than 3 million shares sold that day, more than the company initially planned to offer. By 1987, Microsoft took over as the largest software company in the world measured by sales.
The run-up to $100 billion in market cap came during the time most of the tech stocks were surging, the dot-com boom of the late 1990s.
At the start of 1995, Microsoft had a market cap of $35 billion — by the end of the decade it would be 20 times that size.
It reached $50 billion in market cap in the summer of 1995, and topped $75 billion by autumn of 1996. It would hit $100 billion before the end of that year.
Total time from IPO to $100 billion: 10 years and nine months.
The peak of that run would come just as everybody was getting ready for the Y2K party. On Dec. 27, 1999, Microsoft's market cap hit hit $614 billion. By December of 2000, it was back down below $250 billion as the tech stocks that had buoyed the market for several years all came tumbling back down.
The big drop would come in the 2008-2009 recession, dropping Microsoft's market cap all the way back down to about $135 billion, erasing most of the gains of the previous decade and a half. The recovery was pretty swift though, with the stock rising quickly out of the recession to hit more milestones on its way toward its recent trillion dollar valuation.
It hit $300 billion in 2013, and $500 billion in the spring of 2017.
From there, it was a quick jump to $800 billion the next year and $1 trillion in the summer of 2019.
- 1975: Paul Allen and Bill Gates start Microsoft.
- 1978: The privately-held computer company tops $1 million in sales.
- 1980: Microsoft develops the operating system MS-DOS for IBM's new personal computer.
- March 13, 1986: Microsoft goes public, opens at $21 per share.
- 1995: Microsoft stock starts a long run up through the dot-com boom of the mid- and late-90s.
- 1996: Microsoft tops $100 billion market cap in December.
- 1999: Market cap tops $600 billion.
- 2000: Bill Gates steps down as head of Microsoft to focus on his foundation.
- 2009: The recession drops Microsoft's value to about $135 billion.
- 2013: Market cap hits $300 billion.
- 2014: Satya Nadella becomes Microsoft CEO.
- 2017: Market cap at $500 billion.
- 2018: Microsoft becomes the second largest company by market cap at $821 billion when Amazon.com Inc. (NASDAQ: AMZN) dropped after a disappointing earnings report.
- 2019: Microsoft valued at $1 trillion.