It Was Actually Pixar, Not Apple, That First Made Steve Jobs a Billionaire
Steve Jobs and Apple are inseparable in most people’s minds. Even the fact that his name is being linked to Pixar may come as a surprise to people, not to mention that it played a bigger role in his initial wealth.
Without Pixar’s breakout in the mid-1990s, Jobs’s fortune and even his eventual return to Apple would have looked very different. The real story behind this is a winding path of divorce settlements, stubborn bets, animated toys, and a Silicon Valley figure who learned how to bounce back after being shown the door at the very company he co-founded.
A Divorce, A Sale, And A $10 Million Gamble
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Pixar’s roots stretch back to George Lucas. After his divorce in 1983 left him needing cash, Lucas decided to sell off parts of his company. One of those was a small but innovative computer graphics division at Industrial Light & Magic.
The team had been experimenting with early CGI, led by pioneers Ed Catmull and Alvy Ray Smith, joined by former Disney animator John Lasseter. Lucas tried to offload the division for $30 million, but there were no takers. Even Disney passed. Then came Jobs, who had just been forced out of Apple in 1985. He initially offered $5 million, was turned down, and later returned with $10 million to take full ownership. The group and its technology became Pixar, with Jobs as majority shareholder.
Pixar sold high-end graphics computers, made commercials, and licensed software, but the early years weren’t glamorous. Jobs poured money into it to keep it alive and often covered its losses personally. For nearly a decade, Pixar bled cash. Jobs even considered selling multiple times. However, a deal with Disney to produce three feature films kept the spark alive.
The Toy Story Breakthrough
The real turning point came in 1995 with Toy Story, the first feature-length computer-animated film. The film, which featured the voices of Tom Hanks and Tim Allen, became a cultural phenomenon. Disney distributed the movie, but Pixar’s creative and technical achievement was impossible to ignore.
Jobs saw the potential and timed Pixar’s initial public offering to coincide with the film’s release. It was a bold move. The IPO was priced in the $12–14 range but closed the first day at $39 a share, an increase of 77 percent. Because Jobs owned about 80 percent of the company, his net worth jumped past $1 billion almost overnight.
Disney’s Buyout And The Fortune That Followed
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Pixar went on to become the studio behind modern classics like Finding Nemo, The Incredibles, and Ratatouille. Jobs remained its largest shareholder and held his stake through Hollywood’s ups and downs. In 2006, Disney acquired Pixar in an all-stock deal worth $7.4 billion. The transaction handed Jobs about 7 percent of Disney, valued at $4.6 billion then, and gave him a seat on Disney’s board.
By then, Jobs had already returned to Apple in 1997, where he would lead the creation of the iMac, iPod, and eventually the iPhone. However, the financial safety net that Pixar provided gave him the confidence to take on that role. Without Pixar’s success, his return to Apple might have looked much riskier.