1987 started with a bang. The stock market had been surging. Dow crossed 2000 for the first time. Microsoft and Sun MicroSystems had gone public in 1986.
Excelan sales had gone from $10 million in 2005 to $23 million in 2006. Profits had exploded, going from $100K in 2005 to more than $3 million in 2006. Investment bankers had been all over us to take us public. We picked Alex Brown and L.R. Rothschild to take us public.
IPO road show is a trip of lifetime. We went to NYC, Chicago, Dallas, Houston, Minneapolis, San Francisco, London, Edinburgh in two weeks time. We flew back on Concorde from London to NYC where we landed at JFK before we left Heathrow, on 26th and then onto San Francisco. IPO happened following morning on Feb 27. It was a very successful IPO. We listed at the upper end of the range at $12/share and opened at $15. Settled around $14 that day. Company was priced at $120 million on the cover of S1 (IPO filing form). That is probably equivalent of $500 million in today’s dollars.
Flush with a new currency, I did my first acquisition. We acquired Kinetics in Walnut Creek. Kinetics specialized in Apple networking, a gaping hole in our line up of Unix, VMS and PC networking. After that, we were the only game in town if you needed to connect your PC, MacIntoshes, Unix machines, Vaxes and PDPs using Ethernet and TCP/IP and do file transfers back and forth. A very big deal at the time!
Later that spring I got named as an entrepreneur of the year in the bay area by Venture magazine and Arthur Young (predecessor of Ernst and Young).
After beautiful summer when the stock market peaked at 2700 before came the crash of October 16, 1987. Market lost 500 points on that Friday and lost another 500 on following Monday. Stock market crash took it down to less than 700 in a week or so. Excelan stock which was trading at $18/share went to about $6/share.
I was in Boca Raton Florida with the family where all the entrepreneurs of the years from all over the US were gathered to celebrate when this stock market drama unfolded. It sure rained on our parade!
Excelan did well that year when we ended the year with almost $40 million in sales and $6 million in profit. Stock ended the year at about $7.
All in all, it was a very good year.
