May 1992


Jobs' stake dips below 50 percent

by Dan Lavin

Redwood City, CA: For the first time since the company's founding, NeXT Computer disclosed recently that CEO Steve Jobs no longer owns half of all NeXT stock, with his stake falling to only 46.1 percent.

Jobs's decline in shares is not the result of the sale of stock but caused by the issuance of more shares in the company, presumably to Canon and NeXT employees. Recent company documents disclosed that Canon has increased its stake to 17.9 percent of the company. According to sources, Canon invested an additional $10-$20 million in the company in December 1991.

NeXT employees now own almost 24 percent of the company, up from 20 percent a year ago.

Employees at NeXT typically rely on future stock appreciation through options as a significant part of their compensation. Every employee receives options that vest over four years when they join NeXT, presumably leading to the increase in employee ownership.

The percent owned by Texas billionaire H. Ross Perot also declined.

When NeXT goes public, the current owners' stake will drop even more. Between 20 percent and 40 percent of a company's stock is typically sold to the public during an IPO, according to Brian Mutert, president of San Francisco-based Strategem Investment Banking. Jobs's stake would probably drop to between 28 percent and 37 percent.

The current drop in Jobs's stake conflicts with the popular perception that he would always retain a majority of stock to avoid a repeat of his ouster from Apple Computer. But with the almost one-quarter interest held by employees, Jobs still has full control of the company.

Still, keepers of the NeXT flame are nervous about Jobs ownership dropping below 50 percent, regardless of his retaining control. "I'm fairly surprised," said Dave Pollak, co-director of the Boston Computer Society NeXT User Group.

"Between the recent management changes and this stock news, it looks like Apple all over again," he said.

Who owns NeXT?

Percent ownership of NeXT stock
Jan. 1991 March 1992
Jobs: 50 46.1
Employees: 20 23.9
Canon: 16.67 17.9
Perot: 12.51 11.3
Stanford/CMI: 0.82 0.7

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