Tramiel's Atari IPO - 1986 - raises about $50 million

[EdS]

The Atari ST range were, apparently, the big thing in 1985 and 1986, and Atari - the bit of it run by Jack Tramiel - raised funds from the stock market on the prospects.

Here’s Jack T’s share cert, worth $40 now but showing asset value of a million at the time:

The filings describe the ST as a fast computer and the only one with a megabyte for less than a kilobuck:

The Company’s business strategy is to offer in the ST series advanced microcomputer memory capacity and processing speed technology and to price the ST series as an industry leader based on price-to-memory capacity and price-to-processing speed. The Company believes the 1040ST to be the first microcomputer offering more than one million bytes of internal memory (as much as the Apple Macintosh Plus and more than the standard IBM PC-AT and Commodore Amiga) at a manufacturer’s list price of less than $1,000. The Company’s ST computers also feature color and high resolution graphics; easy-to-use operating features; and processing speed equalling or exceeding that of any standard 16/32-bit configuration IBM, or any Apple or Commodore microcomputer, as well as those of the Company’s other principal competitors, at lower suggested retail prices than these competing products, comparably equipped.

Some several hundred pages of info about Atari’s IPO posted to the Internet Archive by Kay Savetz:

I am positive there are many amazing, unknown facts about the company’s history in these pages — now, let’s find them.

(This being the reincarnated and subdivided Atari, split by Warner Comms into arcade and computer businesses, the computer part sold to Tramiel for $240 million of promises, and temporarily funded by Warner… who got paid $36 million out of the funds raised at IPO, as well as getting 7 million shares.)

Here’s the NYT on the IPO:

The Atari Corporation, based in Sunnyvale, Calif., made its initial public offering of 4.5 million shares, or 16 percent of the company.

While the shares opened at $11.50, which was at the low end of the range specified in Atari’s prospectus, they moved up to $12.50 by the close of trading today on the American Stock Exchange. Atari’s prospectus indicated it had net income of $12.4 million in the first half of 1986 on sales of $105.6 million. It lost about $26.7 million in 1985.

Here’s the competitive landscape according to Atari’s filings:

[IsaacKuo]

Atari ST looked pretty hot the first year. I don’t really know why it all went south so quickly here in the USA. I guess retailer wariness of Jack played a part. And also, the Atari brand just wasn’t something businesses were comfortable with.

But ignoring the Atari brand and any bad blood with Jack, on paper the Atari ST with monochrome monitor looked like a great Mac killer in terms of specs and price. Much bigger screen, with better resolution. WAY faster boot time, heh heh.

[jimt]

I still have my JTS Corporation stock certificate (but only have photocopies of my Atari stock that I had to surrender during the reverse merger to get it). The Atari certificates were prettier. And more valuable.

[larsbrinkhoff]

It did pretty well in Europe.

When the Amiga 1000 came out, it was a gorgeous machine but an expensive pipe dream. The Atari ST was an affordable 68000 for the masses. When Commodore followed up with the Amiga 500 they were more evenly matched in the market.

[IsaacKuo]

Yeah, one thing that can be surprising is how different prices were in different countries. Here in the USA, I think the difference between Atari ST price and Amiga price was not so much. Like, the price for a full system (including monitor) was something like - Atari ST was roughly 1/3 of Mac price $800, while Amiga was roughly 1/2 of Mac price $1200.

That’s certainly a significant price difference, but not enough of a difference to turn it into a “pipe dream”. The Amiga was affordable enough that Deluxe Paint and Defender of the Crown turned it into a popular game development platform. As a result, when the Amiga 500 made Amiga more affordable, there was already a large library of software that took advantages of its extra hardware capabilities compared to the Atari ST. I don’t think the Amiga would have been so big in Europe were it not for the luck of that string of circumstances.

Consider what would have happened if the Amiga mostly just got Atari ST ports without enhancement. When the Amiga 500 was released it would have been a big nothing-burger to European customers. Why bother paying more for a computer that just plays slightly slower ports of the same games?

Look at The Mindset. Really cool hardware, but forgotten. It started off closer to Mac price than Amiga price, and never got any sort of “killer apps” like Deluxe Paint or Defender of the Crown, and so … oh well. It just became an also-ran.

[larsbrinkhoff]

$1200 would be fine as a working professional, but was out of the question to me as a young teenager. Also, I suspect the price was higher here in Europe. The Atari ST though, was more like $500 or so when I got one around 1987.

In my circles, there was something like a 50/50 split between Amiga owners and Atari ST.

[EdS]

Broadly, I think prices in the UK were pounds-for-dollars, which was about twice as much at the time. And then factor in that people in the UK had less disposable income than those in the US, and you find most US machines were much less affordable over here.

I think though that Commodore UK had a lot of independence - perhaps the way they worked with the retailers, and perhaps the bundles they offered were crucial.

I suspect Deluxe Paint was a killer app - whether or not people used it much, the demo image was compelling:

[larsbrinkhoff]

Under Atari Corp, the 8-bit line seemed to get new lease of life with the XE130 which used the same design language as the Atari ST. It seemed especially popular in Eastern Europe.