Akamai stock grows 50x on first day of IPO
Shareholder Apple makes as much money as it did selling Macs
Net acceleration specialist Akamai saw its stock price quintuple on Friday, its first day as a public company, as an initial sale price of $26 closed at $145.19. That left the company worth over $13 billion and its founders multi-millionaires. Which was, of course, the whole point, but who can blame them for that? The IPO also boosted Apple's assets by well over half a billion dollars thanks to the 4.7 per cent stake the company made in Akamai earlier this summer. Apple paid just $12.5 million for its 4.1 million shares, making for a near-fiftyfold return on its investment. Apple made in day's stock market trading as much profit as it made selling Macs for a twelvemonth. At this point, your reporter realises he's probably in the wrong job. Ahem... Meanwhile, Cisco and Microsoft has also pumped money into Akamai this year. Cisco spent $49 million for a four per cent stake, netting a sum just a little under Apple's but for a much smaller ROI. Still, since Cisco was paying more for access to Akamai's technology than its shares, the Great Satan of Routers will probably do rather better out of the deal in the long run. How much of the company Microsoft's $15 million cheque bought the Beast of Redmond isn't known -- it's probably tucked away in a vast Securities and Exchange Commission filing -- but expect its return to be significant. Apple is key to Akamai's business -- it was responsible for 75 per cent of Akamai's turnover during the first half of the year, and the company expects Apple's input as a customer to be "significant" for the rest of the year. Of course, Microsoft is now a customer too, but Apple is likely to remain the heaviest user of Akamai's 1200-server global network, using it to host its Web site, software download facility and its QuickTime TV streaming video channel. Since Apple and Microsoft are both competing for dominance of the streaming media market -- Apple with QuickTime, Microsoft with Media Technologies for Windows -- it will be interesting to see how long Akamai can remain on good terms with both. For the time being, both industry giants are targeting RealNetworks rather than each other, so Akamai is safe, but such inadvertent 'co-operation' can't be counted upon. ®
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