The suite quieted down.
The investment bank representatives exchanged glances.
An offering price of twenty-two dollars meant that Pixar's valuation would reach an incredibly exaggerated level.
For a company that had just released its first feature film, this defied traditional financial valuation models.
The box office miracle of Hollywood, the tech halo of Silicon Valley, and the sales endorsement from Sega in the gaming market—these three forces intertwined to tell Wall Street an unprecedented business story.
"Deal," the lead underwriter finalized.
November 29, Wednesday.
Nasdaq Stock Market.
At 9:30 in the morning, the opening electronic bell rang, and PIXR was officially listed.
Market makers on the trading floor stared intently at their screens.
According to standard procedure, the opening price would fluctuate near the offering price.
This time, the computer system that matches trades encountered trouble.
Sell orders were few and far between, while buy orders surged in like a tsunami.
The offering price of twenty-two dollars was left in the dust the very first second the market opened.
The bid prices kept jumping higher.
Thirty dollars.
Thirty-five dollars.
Forty dollars.
Due to the severe imbalance in orders, Nasdaq had previously been forced to delay the opening time for PIXR.
It wasn't until the system barely managed to find a balance between buyers and sellers that the first trade was executed.
Opening price: forty-seven dollars.
California, Pixar headquarters.
Jobs did not go to New York to ring the bell.
He stayed in his office, with a Bloomberg terminal connected to real-time quotes in front of him.
The numbers on the screen continued to jump, with the intraday high reaching forty-nine point five dollars.
Lawrence Levy pushed the door open and walked in, holding a printed trading brief in his hand.
The two made eye contact; neither celebrated loudly.
Jobs looked at the screen.
Ten years of dormancy, the low point of being ousted from Apple, were completely settled on this day.
He held 80% of Pixar's shares. Based on the current stock price, his personal paper wealth had surpassed the $1 billion mark in just a few hours.
He was no longer the outcast who had been ousted from his own company.
He had joined the ranks of Silicon Valley billionaires.
At 4:00 PM, the Nasdaq closed.
The final closing price of PIXR was fixed at $39.
Compared to the offering price of $22, the single-day gain reached 77%.
By selling approximately 6.9 million shares, Pixar successfully raised $132 million from the market.
This money completely changed the fate of the company and shifted the power structure of Hollywood.
Burbank, Disney headquarters building.
Michael Eisner stared at the closing data on the terminal.
The atmosphere in the office dropped to freezing.
The head of the offering and several senior vice presidents sat on the sofa, waiting for instructions from the CEO.
"$132 million," Eisner read the number aloud, picked up the water glass on the table, and took a sip. "Jobs now has enough cash in hand. He no longer needs Disney's production funding to develop his next film."
"Our contract is still valid," the Head of Legal reminded them. "They still owe us two movies."
"Contracts only bind cash-strapped studios," Eisner said, placing his water glass back on the table. "Pixar now has a market valuation of one billion dollars and is backed by Wall Street. In the next negotiation, Jobs will demand an even split of the box office, or even demand to retain ownership of the IP. We've lost our biggest bargaining chip."
The Head of Distribution opened the memo in his hand. "Sega's promotional campaign in North America played a fueling role in achieving such a high premium for this IPO. To promote the Jupiter console, Sega plastered the Toy Story GG all over major theaters and department stores across the U.S. Wall Street analysts specifically mentioned in their research reports the amplifying effect of game sales on the IP's value."
Eisner walked to the floor-to-ceiling window and looked out at the distant Los Angeles skyline.
Disney originally just wanted to find a cheap computer animation studio for contract work, while earning some game licensing fees on the side.
We single-handedly built up a competitor.
Jobs used Disney's distribution channels to prove the value of the content, leveraged Sega's next-generation consoles to demonstrate the commercial scalability of the IP, and finally packaged it all up to sell to Wall Street.
"Find out what Sega's North American strategy is moving forward," Eisner turned to his executives and gave the order. "Hollywood can no longer treat video games as mere peripheral accessories. Sega has once again pulled the lever on Wall Street. We need to re-evaluate our partnership terms with Sega, as well as the Hollywood projects they are eyeing.
The string of successful simultaneous collaborations, especially Jurassic Park two years ago and now Toy Story, shows that Sega's vision in the film market is not to be underestimated."
At the same time, on the other side of the Pacific.
Tokyo, Japan. Sega Headquarters Building.
In the Managing Director's office, Takuya Nakayama was flipping through the financial morning paper sent from North America.
The front page featured a photo of Jobs next to an eye-catching headline: "The Billion-Dollar Animation Miracle: Pixar Rewrites Hollywood's Rules."
Steam rose from the black tea on the desk.
Yuji Naka knocked and entered, holding a development progress report. "Managing Director, a briefing from the North American branch. Pixar's stock soared on its first day. President Kalinske mentioned that tech and financial media across the U.S. are covering it."
Takuya Nakayama took the report and pushed the newspaper aside.
"As expected." Takuya flipped to the inner pages of the report. "Jobs is a businessman who has mastered capital operations and marketing strategy. He has precisely nested the movie premiere, the simultaneous game release, and the IPO timeline together."
"It's an impeccable commercial closed loop."
"Does this affect Sega's follow-up collaboration?" Yuji pulled out a chair and sat down.
"Yes, and it's a positive return." Takuya Nakayama signed his name at the end of the report. "Pixar has ample funding, and to maintain a high stock price, Jobs must accelerate the production cycle of subsequent feature-length animated films. They need to continuously prove their profitability to Wall Street. Video games are one of the most efficient channels for monetization with the most lucrative profit margins. In future collaborations, Pixar will increasingly rely on Sega's technical support and sales network to tell stories, especially to Disney."
Takuya Nakayama stood up and walked to the whiteboard on the wall.
On it was drawn a roadmap for Sega's hardware distribution and software development over the next three years.
"Disney's management should be realizing it by now." Takuya Nakayama picked up a black marker and drew a dashed line between the Pixar and Disney logos. "Michael Eisner will discover that Disney only played the role of a conduit in this capital feast. The core interests were cashed out by Jobs. And Sega, riding this tailwind, has sold the Jupiter console into hundreds of thousands of American households that weren't previously traditional gamers. Meanwhile, Pixar, which should have been in their pocket, is no longer as willing to be manipulated by them as before."
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