Microsoft IPOs, Bear Stearns Sells For $2, and The First Ever Domain Name

The market is crashing and it’s index rebalancing season- in with the hot new names, and out with those not cool enough.

Congratulations to DoorDash $DASH ( ▲ 2.59% ) , TKO $TKO ( ▲ 1.93% ) , and Hims $HIMS ( ▲ 5.37% ) for making their way into the S&P 500.

If anyone can explain what Palantir $PLTR ( ▲ 7.27% ) does, we’d love to hear it-they’re now in the S&P 100. Gold stars for you, Peter Thiel.

Getting included in a major index is great news for shareholders- institutional investors need to buy the stock to include in their ETFs and mutual funds, and it can cause a buying frenzy. See what happened after Tesla’s $TSLA ( ▲ 5.37% ) in 2020.

Let’s take a look at the major events from this week in business history.

March 15, 1985: The First Ever Domain Name is Registered 📅

If you want to buy a book, just go to 108.174.10.10. That’s the IP address for Amazon- before the Domain Name System (DNS) started, that’s how you’d have to do it.

Forty years ago, Massachusetts computer manufacturer Symbolics changed the way the internet worked by registering symbolics.com, the first ever internet domain name. At the time, the internet was used only by researchers and the government who typed in IP addresses to visit the sites they wanted. Symbolics’ move to text-based addresses was the first step to making the internet accessible to a wider audience and lead to mass adoption.

The original IP address system, called IPv4 (Internet Protocol Version 4), had a 32-bit system that allowed for 4.3 billion unique addresses. As the internet took off, those began running out, and changes were made in 1998 to allow for a near limitless number of websites.

Domain name registration is a big business to this day, with companies paying steep premiums for more desirable domain names. In the late 90’s and early 2000’s, domain name “squatting” came into fashion, with savvy users buying up dozens of one word domain names in hopes of reselling them at steep profits.

Today, symbolics.com no longer belongs to the original company, but the page remains active as an artifact of internet history.

March 13, 1986: Microsoft IPOs 📅

Microsoft $MSFT ( ▲ 2.06% ) held its IPO on the NASDAQ stock exchange at a price of $21 per share giving Microsoft a market capitalization of around $777 million. The IPO turned Microsoft co-founder Bill Gates and several early employees into millionaires overnight.

Goldman Sachs originally suggested an offer price of $17-20, and Gates countered that he wanted to offer it lower- $16 per share- to guarantee that the underwriters would sell every share. After seeing the demand from institutional and retail investors, they agreed on $21, and the stock closed at $27.75.

March 16, 2008: A Dark Day For Bear Stearns 📅

JPMorgan Chase $JPM ( ▲ 2.25% ) agreed to acquire Bear Stearns for just $2 per share in a rescue deal during the financial crisis. Bear Stearns, once a major investment bank, faced a liquidity crisis after its hedge funds collapsed due to exposure to subprime mortgage-backed securities.

The deal was facilitated by the U.S. Federal Reserve, which provided a loan to JPMorgan to ensure the acquisition went through and prevent further panic in the markets. Just prior to this offer, Bear Stearns' shares were worth over $170.

Bear Stearns, in business since 1923, was no more.

March 12, 2001: The Dot Com Bubble Bursts With Webvan 📅

Webvan was way ahead of its time- an early internet grocery delivery service started in the late 90’s promising quick delivery times. The company expanded quickly, investing in warehouses and delivery trucks, but had a tough time with actually attracting customers not quite ready for DoorDash $DASH ( ▲ 2.59% ) .

The company was valued at over $1 billion at its peak, but declared bankruptcy on March 12, 2001, as it failed to reached profitability. In looking back on the Dot Com Bubble, the bankruptcies of Webvan and Pets.com are the two strongest examples of the times.

Right idea, wrong time.

Going Private 📅

Last week, Walgreens $WBA ( 0.0% ) announced that it would be going private. In a $10 billion deal with private equity firm Sycamore Partners, the pharmacy chain would receive $11.45 per share, or 8% over the stock’s price.

The 100-year old pharmacy chain has come across some tough times. Valued at close to $100 billion less than 10 years ago, Walgreens has had a tough time competing with Amazon, Walmart, and online pharmacies. As a result, their debt obligations have risen to over $30 billion, and the store announced they’d be closing down over 1,200 stores over the next three years to cut costs.

A once-proud company getting bought out by private equity during tough times? It’s a tale as old as time.

A funny twist to the story- in 2022, Walgreens entered a $200 million dollar partnership with startup Cooler Screens to replace its refrigerator doors with digital displays. The screens were glitchy and customers hated the display, and Walgreens tried to end the partnership. Cooler Screens responded by “bricking” the displays, showing blank screens.

Looking Forward 📅

That’s old news- what can we look forward to this week?

• Oracle $ORCL ( ▲ 3.27% ) , Adobe $ADBE ( ▲ 0.59% ) , and Volkswagen $VLKAY ( ▼ 0.99% ) release earnings.

• Consumer Price Index (CPI) data will be released on Wednesday, giving us an idea of how inflation is changing month over month and annually.

• Amplitude $AMPL ( ▲ 5.29% ) , WEX $WEX ( ▲ 2.0% ) , and Consolidated Edison $ED ( ▼ 0.69% ) hold investor days.

• Black Bag, directed by Steven Soderbergh and starring Michael Fassbender, is released in theaters. Looking forward to this one.

• March Madness is right around the corner with conference tournaments and Selection Sunday coming up. Good luck to your school.